How to calculate GST from a GST-inclusive price in NZ
Two short formulas at the 15% rate, with worked examples.
To find the GST in a New Zealand price that already includes 15% GST, multiply the price by 3 and divide by 23. That is the same as price × 15 ÷ 115. To find the price without GST, multiply by 20 and divide by 23. To add GST to a GST-exclusive price, multiply by 1.15. For example, $115 including GST contains $15 of GST and $100 excluding GST. Use the same rounding method consistently and show the result in New Zealand dollars. 4invoices calculates the totals from the price and GST rate you enter on each line. It does not decide which rate applies.
- GST in a GST-inclusive price = price × 3 ÷ 23.
- Price excluding GST = GST-inclusive price × 20 ÷ 23.
- Price including GST = GST-exclusive price × 1.15.
- Example: $115 including GST is $100 plus $15 GST.
How it works
Start with the GST-inclusive price, for example $230.
Multiply by 3: 230 × 3 = 690. Divide by 23: 690 ÷ 23 = 30. The GST is $30.
Subtract the GST from the price: 230 − 30 = 200. The GST-exclusive price is $200.
Check by going forward: 200 × 1.15 = 230.
For prices that do not divide evenly, such as $1,000 including GST, the GST is 1,000 × 3 ÷ 23 = $130.43, and the price excluding GST is $869.57. Round to the cent in one consistent way.
Legal references
- Goods and Services Tax Act 1985 — GST rate of 15% and the tax fraction.
- Inland Revenue, GST guide (IR375) — GST-inclusive and GST-exclusive amounts on taxable supply information.
Frequently asked questions
Why is the fraction 3/23 and not 15%?
A GST-inclusive price is the exclusive price plus 15%, so it equals 115% of the exclusive price. GST is 15 out of that 115, which simplifies to 3 out of 23.
How do I add GST to a price?
Multiply the GST-exclusive price by 1.15. GST is the exclusive price × 0.15.
Can I show only a GST-inclusive price on an invoice?
Yes. In every value band Inland Revenue allows the GST-inclusive amount with a statement that GST is included, charged at the standard rate for all the goods and services listed, instead of showing the GST amount separately. Check the guide for your case.
Does 4invoices do this calculation for me?
4invoices adds up your invoice lines and applies the GST rate you set on each line. It does not choose the rate, file returns or connect to Inland Revenue. There is a 6-month free trial without a card.