How to calculate GST in NZ: adding, removing, and common mistakes

NZ GST is 15%. That sounds simple, but there are two different calculations depending on whether you're starting from a GST-exclusive price or a GST-inclusive total. Getting these backwards is a surprisingly common mistake, and it creates errors in your invoices and GST returns that compound over time.

Adding GST to a price

When you know the GST-exclusive price and need to find the GST-inclusive total:

Formula: GST-exclusive price × 1.15

Examples: - $500.00 × 1.15 = $575.00 (GST: $75.00) - $1,200.00 × 1.15 = $1,380.00 (GST: $180.00) - $83.50 × 1.15 = $96.03 (GST: $12.53)

Use this when quoting a price to a client: your quoted rate is exclusive of GST, and you add 15% to get the invoice total.

Removing GST from a GST-inclusive total

When you have a GST-inclusive amount and need to find the GST component or the GST-exclusive price:

To find the GST-exclusive price: GST-inclusive total ÷ 1.15

To find the GST amount: GST-inclusive total - (GST-inclusive total ÷ 1.15)

Example starting from $575.00 (GST inclusive): - GST-exclusive: $575.00 ÷ 1.15 = $500.00 - GST amount: $575.00 - $500.00 = $75.00

You may have seen the "divide by 11" shortcut. That formula is for Australia, where GST is 10% (10/110 = 1/11). It does not apply in NZ. At 15%, dividing by 11 understates the GST and overstates the GST-exclusive price.

The correct NZ formula at a glance

Summary of the three calculations you'll use most often:

PayWren does this automatically: GST-compliant invoices, expense tracking, and IRD-ready reports for NZ freelancers. Free to start.

When rounding matters

GST calculations often produce amounts with more than 2 decimal places. IRD's rule: round to the nearest cent at the end of the calculation, not at intermediate steps.

Example: - Invoice subtotal: $683.50 - GST: $683.50 × 0.15 = $102.525 - Rounded: $102.53 (round half up) - Total: $786.03

Not $102.52 or $102.50. The rounding error per invoice is tiny, but it accumulates across hundreds of transactions and creates discrepancies in your GST return that IRD's system will flag.

GST on invoices: what to show

A compliant NZ tax invoice must show the GST breakdown clearly. You have two options:

Option 1 (recommended): Show the GST-exclusive subtotal, the GST amount as a separate line, and the GST-inclusive total.

Option 2: Show the GST-inclusive total only, with a statement that GST of $X is included.

Option 1 is clearer for your clients (especially business clients claiming input credits) and less ambiguous in an audit. Most accounting software defaults to Option 1.

Free GST calculator

PayWren's GST calculator handles both directions: enter a price and select whether it's GST-exclusive or GST-inclusive, and it instantly shows the GST amount, the other price, and a breakdown you can screenshot or copy.

It also handles the edge cases: split invoices with mixed GST and zero-rated lines, partial GST for mixed-use assets, and reverse-charge GST on imported services. No sign-up required.