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.
Official sources
Every rate and threshold in this guide is checked against the official government sources below. Always confirm figures for your own situation before filing.