Removing GST is not subtracting it
To take 5% GST out of a $1,050 total you divide by 1.05, which gives $1,000 net and $50 of tax. Subtracting 5% of $1,050 gives $997.50, which is wrong by $2.50 on a small number and by real money on a large one.
The higher the rate the worse it gets. At 18% the two methods differ by more than three percent of the whole invoice.
GST, VAT and sales tax
GST and VAT work the same way: charged at each stage, with businesses reclaiming what they paid, so the tax lands on the final buyer. Different countries use different names for the same mechanism.
US sales tax is different in kind. It is charged once, at the point of sale to the end customer, and businesses buying for resale are exempt rather than reclaiming. If you are selling in the United States, the sales tax calculator is the right page.
On the invoice, show three lines
Net, GST, total. A tax-inclusive single figure is the one that gets queried, because the other side needs the tax broken out to reclaim it. The button under the result carries the net amount into the invoice generator with the rate already set, so the document does the split for you.
Related calculators
- VAT calculatorGST CalculatorAdd or remove VAT for 40 countries
- Sales tax calculatorUS sales tax by state
Questions people ask
How do I remove GST from a total?
Divide the GST-inclusive total by one plus the rate. At 5%, divide by 1.05. Subtracting 5% from the total instead is a common mistake and gives a smaller, wrong answer.
How do I add GST?
Multiply the net amount by the rate and add it on, or multiply the net by one plus the rate to get the total directly.
What is the GST rate?
It depends on the country and often on what you are selling. Canada is 5% federally with provincial additions, India uses several slabs including 18%, Australia is 10%, New Zealand 15% and Singapore 9%. Rates change, so check the current one.
Is GST the same as VAT?
Mechanically, yes: both are charged at each stage with businesses reclaiming what they paid. The name differs by country. For Europe and the UK the VAT calculator covers the same ground with the right wording.
Is GST the same as US sales tax?
No. Sales tax is charged once, to the final customer, and resellers are exempt rather than reclaiming. For the United States, use the sales tax calculator.
Should the invoice show GST separately?
Yes. The other side usually needs the tax broken out to reclaim it, and a single tax-inclusive figure is the one most likely to be queried.