help with GST, my understanding.

[dont_waste_dollars]

Hi, i think my business will turnover more than 75 this financial year, when should i register for gst? and can you tell me if my understanding is correct

if i bought an item and it included $10.17 GST and i sold it for $139.95 paying $14 GST would that mean i pay the difference between the two figures? which would be $3.83

OR do i pay the whole 14 dollars now but come tax time i get alot back?

Just not sure how the whole thing works like when it is paid, how it is calculated etc. Any help would be great thankyou

[lyndal1838]

My advice would be to see an accountant before you do anything else as you really have no idea how GST works.

If you are a registered business with an ABN you would be filling in a BAS every month/quarter.  That is where you should be declaring and paying your GST, less the amount that you are claiming back.  It is a 2 step process in the BAS but has the effect of you paying just the difference between the 2 amounts.

I would advise not registering for the GST any sooner than you need to as it involves a lot of monthly paperwork that is not necessary unless you have to.  You have 21? days to register after you turn over $75,000.

BTW, the GST included in a sale of $139.95 is $12.72, not $14.00...another reason to see an accountant to make sure you understand your liabilities.

[dont_waste_dollars]

I thought GST was 10%? how did you get that figure?

and if i did reach 75,000 and registered would that mean i only start paying gets from that point on or i have to pay on everything ive made up until that point

[digital*ghost]

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@dontwastedollarss wrote:
I thought GST was 10%? how did you get that figure?

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It is 10%, but the equation is price + 10% GST = sale price, not 10% of sale price = GST.

GST is added on to a base price to get a GST inclusive amount. eg if we didn't have GST inclusive prices on eBay and I sold something for $20, then GST was added to the sale afterwards, it would be 10% of $20; which is $2, so final price is $22. You can see that 10% of $22 is $2.20, though, but if you divide the final price by 11, you get 2, the GST component. 

When $139.95 is the GST inclusive price, it's $139.95 divided by 11 = $12.72

[chameleon54]

You add 10% to your selling price to allow for the GST. To find out how much GST is included in the total sale price you need to divide the sale price by 11. In the example of  $ 139.95  the original price would have been $127.23 add $12.72  ( 10% of sale price ) this gives $139.95 total GST incl. The GST system is complex untill you get your head around it and a pain in the butt after you have it worked out. As Lyndall has advised it is essential you speak to an accountant.

[chameleon54]

Touche DG  !!!

[digital*ghost]

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@chameleon54 wrote:

Touche DG  !!!

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I'm oddly attracted to maths in threads o_O . Even if I know nothing else about a thread's subject, I'll be all like 

[dont_waste_dollars]

oh wow, so obvious now haha. Alright awesome!

ive already put a formula in my spreadsheet to calculate the gst on my sold item and my bought item and the difference aka what ill have to pay.

Well gst isn't really that bad after all.. when i first realised i might have to pay it i thought **bleep**... ebay fees/paypal 10% .. plus GST 10% im ruined... good to know its not quite that bad!

it was mentioned about filling out a BAS every quarter or month... could anyone give me an idea about what that is? And yes speaking to an accountant would answer the question but id like to pay them as little as possible... infact ill be doing my tax in etax next financial year.. just keeping all receipts etc.. i don't see why i should pay a guy to file my tax when..

IT IS HUMANLY POSSIBLE OVER THE NEXT YEAR TO GOOGLE AND ASK ENOUGH QUESTIONS TO KNOW ABSOLUTELY EVERYTHING I NEED TO KNOW AND DONT SAY IT ISNT 😄

[cherry*135]

You have to lodge a BAS statement every quarter and pay any tax you may owe ( diff between GST paid and GST collected).

You need to get a computerised account program and enter all your transactions and that will provide you with details to complete your BAS. (GST reports)

You can get a fairly basic program if there is no payroll involved.

[cherry*135]

"IT IS HUMANLY POSSIBLE OVER THE NEXT YEAR TO GOOGLE AND ASK ENOUGH QUESTIONS TO KNOW ABSOLUTELY EVERYTHING I NEED TO KNOW AND DONT SAY IT ISNT "

If that was true there would be no need for bookkeepers and accountants. Accountants are good for tax minimisation advice as well.