GST How to Calculate in New Zealand: 15% Formula, Examples & Guide
Author: IRD Guru Editorial Team
Published: 24 August 2026
Last Updated: 24 August 2026
If you are a business owner trying to understand GST how to calculate in New Zealand, the process is usually straightforward when you know whether your price is GST-inclusive or GST-exclusive. New Zealand’s standard GST rate is 15% on most taxable supplies.
Knowing GST how to calculate correctly is important when preparing invoices, pricing products and services, recording business expenses and completing your GST return.
GST How to Calculate in New Zealand
GST in New Zealand is generally charged at 15%. To add GST to a GST-exclusive price, multiply the amount by 15%. To calculate the GST component already included in a GST-inclusive price, multiply the total by 3 and divide by 23.
- Add GST: GST-exclusive price × 15%
- GST-inclusive price: GST-exclusive price × 1.15
- Remove GST: GST-inclusive price × 3 ÷ 23
- GST-exclusive amount: GST-inclusive price − GST component
- Standard GST rate: 15%
For example, if a product costs $1,000 excluding GST, the GST is $150 and the customer pays $1,150. If the customer has already paid $1,150 including GST, the GST component is $150.
GST How to Calculate: The Quick Answer
If you are looking for the simplest answer to GST how to calculate, use the following formulas.
To add GST to a price
GST = GST-exclusive price × 15%
GST-inclusive price = GST-exclusive price × 1.15
To calculate GST included in a price
GST = GST-inclusive price × 3 ÷ 23
To find the price before GST
GST-exclusive price = GST-inclusive price − GST
Example: $1,000 excluding GST
$1,000 × 15% = $150 GST
$1,000 + $150 = $1,150 including GST
What Is GST in New Zealand?
Goods and Services Tax, commonly called GST, is a tax applied to most goods and services supplied in New Zealand. The standard GST rate is 15%.
Businesses that are registered for GST generally charge GST on their taxable supplies and account for that GST to Inland Revenue through their GST returns.
Understanding GST how to calculate is therefore important for businesses that charge GST, because the amount collected from customers needs to be correctly recorded and accounted for.
How to Add 15% GST to a Price
The first part of understanding GST how to calculate is knowing how to add GST to an amount that does not already include GST.
Use this formula:
GST = GST-exclusive price × 0.15
Total including GST = GST-exclusive price × 1.15
Example: $100 excluding GST
$100 × 0.15 = $15 GST
$100 + $15 = $115 including GST
Example: $500 excluding GST
$500 × 0.15 = $75 GST
$500 + $75 = $575 including GST
Example: $1,000 excluding GST
$1,000 × 0.15 = $150 GST
$1,000 + $150 = $1,150 including GST
GST How to Calculate: Quick Reference Table
| Price Excluding GST | GST at 15% | Total Including GST |
|---|---|---|
| $100 | $15 | $115 |
| $250 | $37.50 | $287.50 |
| $500 | $75 | $575 |
| $1,000 | $150 | $1,150 |
| $2,000 | $300 | $2,300 |
| $5,000 | $750 | $5,750 |
| $10,000 | $1,500 | $11,500 |
How to Remove GST From a GST-Inclusive Price
A common mistake when learning GST how to calculate is assuming that you can simply subtract 15% from a GST-inclusive price.
You should not use 15% to remove GST from a price that already includes GST.
Instead, use the GST fraction of 3/23.
GST component = GST-inclusive price × 3 ÷ 23
Example: $115 including GST
$115 × 3 ÷ 23 = $15 GST
$115 − $15 = $100 excluding GST
Example: $1,150 including GST
$1,150 × 3 ÷ 23 = $150 GST
$1,150 − $150 = $1,000 excluding GST
GST How to Calculate From a GST-Inclusive Amount
If you already know the total amount paid by a customer, you can use the following method to calculate the GST component.
| GST-Inclusive Amount | GST Component | Amount Excluding GST |
|---|---|---|
| $115 | $15 | $100 |
| $230 | $30 | $200 |
| $575 | $75 | $500 |
| $1,150 | $150 | $1,000 |
| $2,300 | $300 | $2,000 |
| $5,750 | $750 | $5,000 |
How to Calculate GST on Business Sales
For a GST-registered business, understanding GST how to calculate is important when setting prices and preparing invoices.
For example, imagine a GST-registered business provides consulting services for $2,000 excluding GST.
The GST calculation would be:
$2,000 × 15% = $300 GST
The customer would therefore pay:
$2,000 + $300 = $2,300
The $300 GST collected needs to be accounted for in the business’s GST records and GST return, subject to the applicable rules.
How to Calculate GST on Business Expenses
GST can also be relevant when a GST-registered business purchases goods or services for its taxable activity.
For example, suppose a business purchases equipment for $1,150 including GST.
The GST component is:
$1,150 × 3 ÷ 23 = $150 GST
Whether the full $150 can be claimed depends on the nature and use of the purchase and the applicable GST rules.
A business cannot automatically claim GST on every expense. If an item is used partly for private purposes or for exempt activities, the GST claim may need to be apportioned or adjusted.
How to Calculate GST for a GST Return
Understanding GST how to calculate becomes particularly important when completing a GST return.
In a simple situation, the calculation can be thought of as:
GST collected on taxable sales − eligible GST on purchases and expenses = GST payable or refundable
Example GST return calculation
| GST Item | Amount |
|---|---|
| GST collected on sales | $4,500 |
| Eligible GST on purchases | $2,000 |
| GST payable | $2,500 |
Actual GST returns can involve additional adjustments and accounting-basis requirements, so the simple calculation above should not be treated as a complete GST return calculation for every business.
GST-Inclusive vs GST-Exclusive Prices
Knowing whether a price includes GST is one of the most important parts of understanding GST how to calculate.
| Feature | GST Exclusive | GST Inclusive |
|---|---|---|
| GST already included? | No | Yes |
| Standard rate | 15% | 15% |
| Add GST | Multiply by 1.15 | Not required |
| Find GST component | Multiply by 15% | Multiply by 3 ÷ 23 |
| Example | $1,000 | $1,150 |
GST How to Calculate: Real Business Examples
Example 1: Service priced at $750 excluding GST
$750 × 15% = $112.50 GST
Total including GST = $862.50
Example 2: Invoice for $2,500 excluding GST
$2,500 × 15% = $375 GST
Total invoice = $2,875
Example 3: Customer pays $5,750 including GST
$5,750 × 3 ÷ 23 = $750 GST
GST-exclusive amount = $5,000
Example 4: Customer pays $10,000 including GST
$10,000 × 3 ÷ 23 = $1,304.35 GST
GST-exclusive amount = $8,695.65
Does Every Transaction Have 15% GST?
No. Although 15% is New Zealand’s standard GST rate, not every supply is treated as a standard-rated supply.
Depending on the transaction, supplies may be:
- Standard-rated: GST is generally charged at 15%.
- Zero-rated: GST is charged at 0% and specific GST rules apply.
- Exempt: GST is generally not charged on the supply.
- Special supplies: Certain transactions have specific GST treatment.
This means you should not automatically apply 15% to every transaction when working out GST how to calculate.
Can a Business Claim GST on Expenses?
A GST-registered business may be able to claim GST on eligible purchases and expenses used to make taxable supplies.
However, the GST claim is not automatically available for every expense.
If goods or services are used partly for business and partly for private purposes, the GST claim may need to be apportioned.
For example, if a vehicle is used for both business and private purposes, the GST treatment may require an adjustment based on the relevant business use.
Businesses should keep appropriate records to support their GST claims.
GST Adjustments: When the Basic Calculation Is Not Enough
For some businesses, understanding GST how to calculate requires more than simply applying 15%.
GST adjustments can apply when the business, private or exempt use of goods or services changes.
For example, an asset initially acquired for business use may later be used partly for private purposes. The GST deduction may then need to be reviewed under the applicable adjustment rules.
The treatment can also become more complex for property, vehicles, mixed-use assets and transactions involving exempt supplies.
If your business has significant assets or mixed taxable and private use, professional advice can help ensure the GST treatment is appropriate.
Do You Need to Register for GST?
GST calculation is relevant to businesses that are registered for GST and businesses that may need to register.
If you regularly carry out taxable activities, you may need to register for GST when the applicable registration requirements are met.
Once registered, a business generally charges GST on taxable supplies and can claim eligible GST on purchases and expenses, subject to the relevant rules.
If you are unsure whether your business should register, it is important to check the current Inland Revenue requirements.
Common GST Calculation Mistakes in New Zealand
1. Subtracting 15% from a GST-inclusive amount
If a price already includes GST, simply subtracting 15% will give you the wrong GST component.
For a GST-inclusive price, use:
GST-inclusive amount × 3 ÷ 23
2. Assuming every transaction has 15% GST
Some supplies can be zero-rated, exempt or subject to specific GST rules.
3. Claiming GST on every business expense
GST claims depend on whether the purchase is eligible and how it is used. Private and exempt use can affect the amount that can be claimed.
4. Ignoring GST adjustments
Changes in business, private or exempt use can result in GST adjustments.
5. Treating GST collected as business income
GST collected from customers is generally tax collected on taxable supplies and needs to be accounted for through the GST system.
GST Calculation Cheat Sheet
To add GST
GST = Price × 15%
Total = Price × 1.15
To remove GST
GST = GST-inclusive price × 3 ÷ 23
Price excluding GST = Total − GST
Standard GST rate
15%
GST Calculation Checklist for NZ Businesses
- Check whether the business is GST registered.
- Confirm whether the price is GST-inclusive or GST-exclusive.
- Check whether the supply is standard-rated, zero-rated or exempt.
- Use 15% when adding standard GST.
- Use 3/23 to identify GST included in a GST-inclusive amount.
- Keep taxable supply information and supporting records.
- Check whether GST on business expenses is claimable.
- Consider business, private and exempt-use adjustments.
- Record GST collected on taxable supplies.
- Record eligible GST on purchases and expenses.
- Review the GST return before filing.
People Also Ask: GST How to Calculate
How do you calculate GST in New Zealand?
To add standard GST, multiply the GST-exclusive price by 15%. To find the GST component of a GST-inclusive price, multiply the total by 3 and divide by 23.
How do I calculate 15% GST?
Multiply the GST-exclusive amount by 0.15. For example, $1,000 × 0.15 = $150 GST.
How do I calculate GST from a GST-inclusive price?
Multiply the GST-inclusive price by 3 and divide by 23. For example, $1,150 × 3 ÷ 23 = $150 GST.
How do I calculate GST on $1,000?
If $1,000 is GST-exclusive, the GST is $150 and the total is $1,150. If $1,000 already includes GST, the GST component is approximately $130.43 and the GST-exclusive amount is approximately $869.57.
Is GST always 15% in New Zealand?
No. While 15% is the standard GST rate, some supplies are zero-rated, exempt or subject to specific GST rules.
How do I calculate GST for my GST return?
In a straightforward situation, GST collected on taxable sales is compared with eligible GST on purchases and expenses. Other adjustments and the accounting basis used by the business can also affect the GST return.
Can I claim GST on business expenses?
A GST-registered business may be able to claim GST on eligible business purchases used to make taxable supplies. Private or exempt use can affect the amount that can be claimed.
What is the GST formula for removing GST?
For a GST-inclusive amount at the current 15% standard rate, the GST component is calculated using 3 ÷ 23.
Frequently Asked Questions About GST Calculation
What is the easiest way to calculate GST?
For a GST-exclusive amount, multiply the price by 15%. For a GST-inclusive amount, multiply the total by 3 and divide by 23.
What is the difference between GST-inclusive and GST-exclusive?
A GST-exclusive price does not include GST. A GST-inclusive price already contains the GST component.
Why do you divide by 23 to remove GST?
At the 15% GST rate, the GST component of a GST-inclusive price is 3/23 of the total. This is why the GST-inclusive amount is multiplied by 3 and divided by 23.
Can I use the GST calculation for every transaction?
The standard formulas work for ordinary transactions subject to the 15% GST rate. They may not apply in the same way to zero-rated, exempt or special supplies.
Does a GST-registered business pay GST on its expenses?
GST may be included in business purchases. A registered business may be able to claim eligible input tax, subject to the applicable rules and any private, exempt or mixed-use adjustments.
Getting GST Calculations Right for Your Business
GST calculations can appear simple when a business only has standard-rated sales and straightforward expenses. However, the treatment can become more complicated when a business has mixed-use assets, exempt activities, property transactions, adjustments or different types of supplies.
IRD Guru provides practical guidance on New Zealand tax and Inland Revenue processes. Our content is prepared using current Inland Revenue information and is intended to help business owners understand their obligations and identify when additional professional support may be useful.
For important GST decisions, businesses should consider their individual circumstances and check the current Inland Revenue rules. The correct treatment can depend on the type of transaction, accounting basis, taxable activity and how goods or services are used.
Need Help With Your GST Obligations?
If you are unsure about GST how to calculate, GST registration, GST claims, adjustments or your GST return, getting the right guidance can help you avoid costly mistakes.
Need help understanding an Inland Revenue requirement?
Official Inland Revenue Sources
For the latest GST requirements, always check the current guidance published by Inland Revenue.
- Inland Revenue – What GST is
- Inland Revenue – Charging GST
- Inland Revenue – Calculating GST
- Inland Revenue – Claiming GST
- Inland Revenue – GST adjustments for business, private and exempt use
Official Inland Revenue GST Resources
GST rules can change, so businesses should refer to current Inland Revenue guidance when calculating GST, preparing GST returns or checking whether a transaction is taxable.
