GST Formula NZ | How to Calculate GST in New Zealand
GST formula NZ: the standard GST rate in New Zealand is 15%. This page sets out the three formulas you need: adding 15%, removing GST from an inclusive price, and finding the GST component with the 3/23 rule.
The three GST formulas you need
Add 15% GST: GST = GST-exclusive price x 0.15. GST-inclusive total = GST-exclusive price x 1.15.
Remove GST: GST-exclusive price = GST-inclusive price / 1.15.
Find the GST component: GST = GST-inclusive price x 3 / 23.
Worked example: adding 15%
A consultant in Wellington bills a client $2,000 plus GST. The GST is $2,000 x 15% = $300, so the invoice total is $2,300 including GST.
Worked example: removing GST
A laptop is advertised at $1,725 including GST. The price before GST is $1,725 / 1.15 = $1,500. Check it: $1,500 x 1.15 = $1,725.
The 3/23 rule explained
A GST-inclusive price holds 15 parts GST in 115 total parts, so the GST share is 15/115, which simplifies to 3/23. Multiply any GST-inclusive price by 3/23 to find its GST. For $230: $230 x 3 / 23 = $30 of GST, leaving $200 before GST.
Reverse GST formula NZ
Price before GST = GST-inclusive price / 1.15
GST component = GST-inclusive price x 3 / 23
Example: $230 including GST
$230 / 1.15 = $200 before GST.
$230 x 3 / 23 = $30 GST.
How to calculate reverse GST in Excel
| Task | Excel formula |
|---|---|
| Price before GST | =A1/1.15 |
| GST component | =A1-(A1/1.15) |
| Total from exclusive price | =A1*1.15 |
Reverse GST vs removing GST
For standard NZ GST arithmetic, these describe the same calculation: start with a GST-inclusive amount and recover the amount before GST. The important distinction is the input you have and the result you need.
Avoid the common mistake
The most common error is taking 15% off a GST-inclusive price. For $115, that gives $17.25, which is wrong. The correct GST is $15, found by dividing by 1.15 or multiplying by 3/23. Always match the formula to the price you start with.
GST formula NZ FAQs
What is the GST formula in New Zealand?
To add GST, multiply by 1.15. To remove GST, divide by 1.15. To find the GST inside an inclusive price, multiply by 3/23.
Why does the 3/23 rule work?
Because 15% GST means 15 parts in 115, and 15/115 simplifies to 3/23.
Do these formulas work for zero-rated or exempt sales?
No. Zero-rated supplies use 0% and exempt supplies carry no GST. The formulas here are for standard 15% supplies.
Use the NZ calculator
Use the New Zealand GST Calculator for instant calculations. You can also read How to Remove GST from a Price in NZ, try the GST Component Calculator or the GST Percentage Calculator.
Official source
For current New Zealand GST rules, check Inland Revenue.
