3 Methods to Calculate GST in New Zealand
Calculating 15% GST in New Zealand is straightforward once you understand the three main methods. Whether you need to add GST to a price, remove it from a total, or find the GST amount only, here's everything you need to know.
Method 1: Add GST to a Price (GST-Exclusive → GST-Inclusive)
Formula:
Total = Amount × 1.15
Or: Total = Amount + (Amount × 0.15)
Example:
- Product price (excl. GST): $100
- GST amount: $100 × 0.15 = $15
- Total price (incl. GST): $115
Real-World Example:
A plumber charges $200 for labor (excl. GST):
- GST = $200 × 0.15 = $30
- Total invoice = $230
Method 2: Remove GST from a Total (GST-Inclusive → GST-Exclusive)
Formula:
Amount = Total ÷ 1.15
GST Amount = Total - (Total ÷ 1.15)
Example:
- Total price (incl. GST): $115
- Amount (excl. GST): $115 ÷ 1.15 = $100
- GST amount: $115 - $100 = $15
Real-World Example:
Restaurant bill total is $57.50 (GST-inclusive):
- Meal price (excl. GST) = $57.50 ÷ 1.15 = $50.00
- GST component = $57.50 - $50.00 = $7.50
Method 3: Calculate GST Amount Only
Formula:
GST Amount = Amount × 0.15
Example:
- Product price: $100
- GST amount: $100 × 0.15 = $15
Real-World Example:
Office supplies cost $1,250 (excl. GST):
- GST to add = $1,250 × 0.15 = $187.50
- Total invoice = $1,437.50
Quick Reference Table
| Amount (Excl. GST) | GST (15%) | Total (Incl. GST) |
|---|---|---|
| $50 | $7.50 | $57.50 |
| $100 | $15.00 | $115.00 |
| $500 | $75.00 | $575.00 |
| $1,000 | $150.00 | $1,150.00 |
| $5,000 | $750.00 | $5,750.00 |
| $10,000 | $1,500.00 | $11,500.00 |
Common Mistakes to Avoid
❌ Wrong: Multiply by 0.15 to remove GST
If the price is $115 (incl. GST), multiplying by 0.15 gives you $17.25, not the GST amount.
✅ Correct: Divide by 1.15 first
$115 ÷ 1.15 = $100 (excl. GST), then $115 - $100 = $15 GST
❌ Wrong: Removing 15% from total
$115 - ($115 × 0.15) = $115 - $17.25 = $97.75 ❌ (incorrect)
✅ Correct: Divide by 1.15
$115 ÷ 1.15 = $100 ✅ (correct)
Rounding Rules for New Zealand GST
The IRD requires that you round GST amounts to the nearest cent. For amounts ending in exactly 0.5 cents, round up to the next cent.
- $15.504 → rounds to $15.50
- $15.505 → rounds to $15.51
- $15.506 → rounds to $15.51
💡 Pro Tip: GST Fractions
To quickly find the GST component in a GST-inclusive price, multiply by 3/23.
Example: $115 × 3/23 = $15 GST
This works because 15% ÷ 115% = 3/23
GST Calculation Examples by Industry
Retail Example:
Clothing store sells a jacket for $80 + GST:
- GST = $80 × 0.15 = $12
- Price tag shows: $92 (incl. GST)
Services Example:
Accountant charges $150/hour (excl. GST) for 5 hours:
- Subtotal = $150 × 5 = $750
- GST = $750 × 0.15 = $112.50
- Total invoice = $862.50
Hospitality Example:
Restaurant meal bill is $46 (GST-inclusive):
- Meal price = $46 ÷ 1.15 = $40
- GST component = $46 - $40 = $6
Construction Example:
Builder quotes $25,000 for renovation work (excl. GST):
- GST = $25,000 × 0.15 = $3,750
- Total project cost = $28,750
GST on Discounts and Promotions
Example: Item normally $200 (excl. GST), now 20% off:
- Calculate discount: $200 × 0.20 = $40
- New price (excl. GST): $200 - $40 = $160
- Add GST: $160 × 1.15 = $184
- Sale price (incl. GST): $184
✅ Key Points to Remember:
- New Zealand GST rate is 15% (not 10% like Australia)
- To add GST: multiply by 1.15
- To remove GST: divide by 1.15
- GST applies to most goods and services (including food)
- Always round to the nearest cent
- Keep accurate records for IRD compliance
Using a Calculator
For accurate, instant calculations, use our free GST calculator. It handles all the math for you and ensures proper rounding according to IRD requirements.