Chapter 3

Calculating GST and issuing tax invoice

If you’re a GST-registered business you must add GST to your prices. You also need to issue GST invoices. Find out how.

A calculator on top of some GST documents

Calculating GST and issuing tax invoices

If you’re a GST-registered business you must add GST to your prices. You also need to issue GST invoices to customers. Let’s take a look at the maths and the requirements of both.

How to add GST to prices

Once you’re GST registered, you’ll need to put prices up by 7%. There’s a very simple formula for doing that:

A calculator displaying the equation for working out GST

What are tax invoices?

A tax invoice tells a customer how much GST they paid on a purchase. You must issue a tax invoice when you sell to GST-registered customers.

Tax invoice example

Here’s what you need to put on a tax invoice.

A GST invoice example

A simplified tax invoice can also be used for invoice amounts less than $1000 inclusive of GST. You can get more information on invoicing customers here.

Receipts versus tax invoices

A receipt printed at point of sale is called a tax invoice if it has all of this information on it. But it must contain the words ‘Tax invoice’.

Disclaimer: Xero does not provide accounting, tax, business or legal advice. This guide has been provided for information purposes only. You should consult your own professional advisors for advice directly relating to your business or before taking action in relation to any of the provided content.

Guide to GST

Making a start with GST? Don’t worry. It’s a little extra admin, but follow our guide and you’ll soon be on top of it.

Download the guide to GST

Get your small business tax sorted. Fill in your details to get our full GST guide as a PDF.

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