Guides / Tax basics

How GST Is Calculated: Adding and Removing Tax

GST is a tax added to the price of many goods and services. Sometimes you start with a price before tax, and sometimes you start with a total that already includes it. The two directions use different formulas.

Adding GST to a price

Multiply the price before tax by the GST rate, then add the result. A price of 1,000 with an 18% rate gives a GST amount of 180, and a total of 1,180.

Removing GST from a total

If the price already includes GST, divide it by 1 plus the rate. A total of 1,180 at 18% gives a price before GST of 1,000, and a GST amount of 180. Do not subtract 18% of the total, because that gives the wrong answer.

Check the rate

Different goods and services can have different rates, and rules change. Check the rate that applies to your item in your country before you use a figure for a bill, invoice or return.

Rounding

Tax amounts are often rounded to the nearest cent or paisa. Small differences can appear if you round at different steps, so follow the rounding rules your invoice system uses.

Try it yourself

The GST Calculator works in both directions and shows the price before GST, the GST amount and the total.