Working out your GST refund or payment
When filing a GST return, most businesses must account for all of their purchases and sales. Let’s take a look at the maths you need to do, and some practical bookkeeping tips.
GST is a simple formula
You work out GST by comparing the amount you paid on purchases to the amount you collected on sales.
If you get a positive number, you need to pay that amount to the IRAS. If it’s a negative number, you’ll be refunded that amount.
As a GST-registered business:
- you must submit your GST return to IRAS one month after the end of each prescribed accounting period, or quarterly
- you should report both your output tax and input tax in your GST return
- the difference between output tax and input tax is the net GST payable to IRAS or refunded by IRAS
How to work out GST in four steps
1. Note the GST paid on your business purchases
2. Note the GST collected on sales
3. Add both types of GST
4. Run the GST formula
Avoid nasty surprises with smart bookkeeping
Like any business, you’ll aim to sell more than you buy. If you succeed in doing that, you’ll most likely end up with GST to pay. Run the four-step GST equation regularly so you can:
work out how big your GST payment is shaping up to be
Automate your GST calculations
Manage your GST filing with easy-to-use tax software.
Easily manage your GST F5 with Xero - IRAS-compliant software that makes it easy to stay on top of your tax obligations.
It automatically collects sales and purchase information from multiple sources, and does the maths for you.