Australia's GST (Goods and Services Tax) is refreshingly simple compared to many other countries — one flat rate of 10% applies to most goods and services. Introduced in July 2000, GST replaced the previous wholesale sales tax regime. Prices in Australia are generally displayed inclusive of GST, so the $110 on the label already includes $10 in GST.
The GST Rate Structure
Unlike India's five-rate GST system or the UK's three-rate VAT, Australia uses a simpler approach:
| Category | Rate |
|---|---|
| Most goods and services | 10% |
| GST-free supplies (basic food, health, education, exports) | 0% |
| Input-taxed supplies (financial services, residential rent) | No GST / no credit |
GST-Free Categories
These items are zero-rated — no GST is charged, and the supplier can still claim GST credits on their inputs:
- Basic food: Bread, cereal, meat, fish, fruit, vegetables, eggs, milk, cheese, butter — but NOT confectionery, soft drinks, snack foods, ice cream, or restaurant meals.
- Health: Most medical, dental, hospital services; most prescription drugs on the PBS; medical aids.
- Education: School fees, TAFE and university courses, most childcare.
- Exports: Goods physically exported from Australia are GST-free (international GST-free principle).
- Water and sewerage: Domestic water and sewerage services.
- Precious metals: First supply of gold, silver, or platinum (in certain forms).
Input-Taxed vs GST-Free: The Key Difference
Both result in no GST charged to the customer — but input-taxed suppliers cannot claim GST credits on their inputs. This distinction matters for businesses:
- Residential landlords: Rent is input-taxed. A property investor cannot claim GST on property management fees, repairs etc. related to residential rental.
- Banks and financial services: Interest, loans, insurance are generally input-taxed.
How to Add GST to a Price
If you know the GST-exclusive price:
GST-inclusive price = Ex-GST price × 1.10
Example: $500 (ex-GST) × 1.10 = $550 inc-GST
GST amount = $550 − $500 = $50
How to Remove GST from a GST-Inclusive Price
If the price already includes GST:
Ex-GST price = GST-inclusive price ÷ 1.10
Example: $550 (inc-GST) ÷ 1.10 = $500 ex-GST
GST amount = $550 − $500 = $50
Quick shortcut: Divide by 11 to get the GST amount directly.
$550 ÷ 11 = $50 GST ✓
Common mistake: taking 10% of the inclusive price. 10% of $550 = $55 — wrong. Always divide by 11.
Common GST Examples
| Item | GST? |
|---|---|
| Fresh bread, meat, vegetables | GST-free |
| Hot chips, pies, restaurant meals | 10% |
| Soft drinks, confectionery | 10% |
| Prescription medicines (PBS) | GST-free |
| Non-prescription medicines | 10% |
| Books, magazines | 10% |
| Children's clothing | 10% |
| School fees, university tuition | GST-free |
| Residential rent | Input-taxed |
| Electronics, appliances | 10% |
GST Registration and BAS
Businesses must register for GST when their annual GST turnover reaches $75,000 ($150,000 for non-profits). Once registered:
- You must charge 10% GST on taxable supplies and issue valid tax invoices.
- You lodge a Business Activity Statement (BAS) — usually quarterly — to report GST collected and claim GST credits on business purchases.
- If your GST credits exceed GST collected (common for exporters), you get a refund from the ATO.
- Taxi/rideshare drivers must register for GST regardless of turnover.
Calculate Australian GST instantly
Add 10% GST to a price or remove GST from a GST-inclusive amount.
Open GST Calculator →Source: ATO.gov.au, GST Act 1999. Not financial or tax advice.