Say your business made $115,000 of GST-inclusive sales in the period and spent $46,000 on GST-inclusive purchases. To find the GST inside a tax-inclusive figure at the 15 percent rate, you take 3/23 of it. On $115,000 of sales the GST collected, the output tax, is $15,000. On $46,000 of purchases the GST you paid, the input tax, is $6,000.
Your GST return is simply output tax minus input tax: $15,000 minus $6,000 leaves $9,000 to pay to Inland Revenue. If your purchases had carried more GST than your sales, for example in a quarter with a big equipment buy, the figure would flip and IRD would refund you the difference. The $115,000 of sales contains $100,000 of revenue plus $15,000 of GST, which is why the GST is 3/23 rather than 15 percent of the inclusive total.
Item
Amount
GST on sales (output tax)
$15,000
Less GST on purchases (input tax)
$6,000
Net GST to pay IRD
$9,000
How it is calculated
A GST return nets the tax you collected against the tax you paid. The calculator takes each GST-inclusive total and extracts the GST component using the formula inclusive minus inclusive divided by 1.15, which is mathematically the same as 3/23 of the inclusive figure at the 15 percent rate. It does this for both sales, giving output tax, and purchases, giving input tax. The net GST is output tax minus input tax. A positive result is payable to Inland Revenue, and a negative result is a refund to you, which is common when you make a large capital purchase or have mostly zero-rated exports. This tool assumes the payments basis and standard-rated supplies, so zero-rated and exempt items, which many small businesses do not have, would need separating out before you file.
Frequently asked questions
How is a GST return worked out?
You add up the GST charged on your sales (output tax) and subtract the GST on your business purchases (input tax). If output is more than input, you pay the difference to IRD; if input is more, you get a refund. This tool extracts the GST component (3/23 of a GST-inclusive figure) for both sides at the 15% rate.
How often do you file a GST return in New Zealand?
IRD offers three filing frequencies. Monthly filing suits businesses with turnover above $24 million or those that regularly receive refunds. Two-monthly (six returns per year) is the default for most registered businesses. Six-monthly filing is available to businesses with turnover below $500,000 that do not regularly claim refunds. You can apply to change your filing period through myIR.
What is the GST registration threshold in New Zealand?
You must register for GST when your taxable supplies exceed $60,000 in any 12-month period, or when you expect to exceed that threshold in the next 12 months. Once registered you charge GST on most sales and can claim back the GST on your business expenses. Voluntary registration is available below the threshold, which is often worthwhile if your customers are GST-registered businesses.
Are there supplies that are not subject to 15% GST?
Yes. Zero-rated supplies attract GST at 0%, so you do not charge your customer any GST but you can still claim input tax on related purchases. Common zero-rated supplies include exported goods, land sold as part of a going concern, and most financial services provided to non-residents. Exempt supplies, such as residential rent and financial services to New Zealand residents, sit outside the GST system entirely, meaning you charge no GST but also cannot claim input tax credits on costs related to those supplies.