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Chapter 5

Working out your GST refund or payment

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Small business guides > Quick guide to GST > Working out your GST refund or payment

Working out your GST refund or payment

Working out GST is straightforward maths. Keeping track of all your transactions is the trickiest part. Let’s take a look at the process.

GST is a simple formula

You work out GST by comparing the amount you paid on purchases to the amount you collected on sales.

How to work out GST

If you get a positive number, you need to pay that amount to IRAS. If it’s a negative number, you’ll get a refund for that amount.

How to work out GST in four steps

1. Make a note of the GST paid on your business purchases

How to work out GST you can claim

2. Make a note of the GST collected on sales

How to work out GST you owe

3. Add both types of GST

Calculations for filing a GST return

You must report the totals of GST paid and GST collected on your return – not just the difference between the two.

4. Run the GST formula

GST formula

If it’s a negative number, you’ll get a refund for that amount.

Avoid nasty surprises with smart bookkeeping

Like any business, you’ll be aiming to sell more than you buy. If you succeed in doing that, you’re most likely to end up with GST to pay. Run the four-step GST equation regularly so you can see how big your GST payment is shaping up to be.

Automate your GST calculations

You can use online accounting software like Xero to stay on top of GST. It automatically records GST collected and paid, and does the maths for you.

The software keeps a running count of your GST situation so you always know where you stand. It’s IRAS-compliant – when the GST period is over, you simply run the GST F5 in Xero, print it off, and file it with IRAS.

Online accounting software helping with GST returns

Chapter 6: GST returns and due dates

As a GST-registered business, you’ll need to let the government know how much tax you’ve collected and how much you’ve paid. You do this by filing a GST return (GST F5).

Read next chapter

This guide is intended as general information only. Always check with a professional for advice.

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