Strip 15% GST From Any Receipt or Invoice, Instantly.
Work backwards from a tax-inclusive total to extract the pre-tax base and the exact tax portion. Built for Kiwi contractors, bookkeepers, and sole traders who process receipts daily.
Calculation history & PDF report
Two ways to back-calculate the tax — and when to pick each
Both are mathematically equivalent. The IRD recognises both in its published guidance, but prescribes the 3/23 fraction for official returns.
Division method
$575.00 ÷ 1.15 = $500.00 pre-tax base
Best when you need the full pre-tax amount — e.g. recording an expense line in Xero or MYOB.
3/23 fraction method
$575.00 × 3 ÷ 23 = $75.00 tax portion
Best when you only need the tax figure — e.g. entering the GST content field on your return.
IRD-prescribed methodThree steps from receipt to record
Type your inclusive total
Select a mode — extract the pre-tax base or isolate just the tax portion. Then type the dollar figure from your receipt, invoice, or bank statement.
Save each entry to history
Click “Save to history” to log the breakdown. Stack as many entries as you need — the running totals update automatically so you can reconcile against your accounting software.
Export a branded PDF
Add your business name and a report reference, then download a professional PDF. Hand it to your accountant, attach it to your GST return working papers, or keep it for your records.
How Kiwi businesses use this tool every day
Each scenario below mirrors a common NZ business situation. Every figure is calculated using the IRD 3/23 fraction and verified to the cent.
Stripping tax from a supplier invoice
Mike receives a $3,450.00 invoice from Plumbing World for copper pipe and fittings. Before filing his two-monthly return, he needs to know exactly how much input tax he can claim back.
$3,450.00 − $450.00 = $3,000.00 pre-tax base
Reconciling credit card receipts
Aroha charged $862.50 on her business Visa for camera gear. Her bookkeeper needs the pre-tax figure to enter into Xero before the GST period closes.
$862.50 − $750.00 = $112.50 tax portion
Working out tax on daily takings
Ben’s cafe rings up $2,530.00 in sales on a busy Saturday. He tracks daily output tax in a spreadsheet so there are no surprises at filing time.
$2,530.00 − $330.00 = $2,200.00 pre-tax takings
Verifying a client payment
Priya invoiced a client $9,200.00 including GST for a three-month dev contract. She wants to confirm the output tax she must remit to IRD and the net revenue she can actually draw.
$9,200.00 − $1,200.00 = $8,000.00 net revenue
Quoting a job and separating the tax
Dan quotes a residential garden makeover at $5,750.00 all-in. His customer asks for a tax invoice showing the pre-tax labour and materials cost separately from the GST line.
$5,750.00 − $5,000.00 = $750.00 tax portion
Extracting tax from monthly Shopify revenue
Tama’s Shopify store processed $14,375.00 in total sales last month. All prices are listed GST-inclusive. He needs the aggregate tax figure for his return.
$14,375.00 − $1,875.00 = $12,500.00 pre-tax revenue
Common reverse-GST breakdowns at a glance
Bookmark this table for fast mental checks. Every row is calculated using the 3/23 fraction and rounded per IRD rules.
| Inclusive total | Pre-tax base | Tax portion (15%) | Verification |
|---|---|---|---|
| $23.00 | $20.00 | $3.00 | $20.00 + $3.00 = $23.00 |
| $57.50 | $50.00 | $7.50 | $50.00 + $7.50 = $57.50 |
| $115.00 | $100.00 | $15.00 | $100.00 + $15.00 = $115.00 |
| $230.00 | $200.00 | $30.00 | $200.00 + $30.00 = $230.00 |
| $575.00 | $500.00 | $75.00 | $500.00 + $75.00 = $575.00 |
| $1,150.00 | $1,000.00 | $150.00 | $1,000.00 + $150.00 = $1,150.00 |
| $2,300.00 | $2,000.00 | $300.00 | $2,000.00 + $300.00 = $2,300.00 |
| $5,750.00 | $5,000.00 | $750.00 | $5,000.00 + $750.00 = $5,750.00 |
| $11,500.00 | $10,000.00 | $1,500.00 | $10,000.00 + $1,500.00 = $11,500.00 |
| $23,000.00 | $20,000.00 | $3,000.00 | $20,000.00 + $3,000.00 = $23,000.00 |
Why 3/23 exists and how it produces cent-perfect accuracy
Understanding the mathematics behind every reverse calculation — and why it matters when you process hundreds of receipts a month.
Step 2: Tax fraction = 15 ÷ 115
Step 3: Tax fraction = 3 ÷ 23 = 0.13043478...
Example: Receipt total (incl. GST) = $1,150.00
Tax portion = $1,150.00 × 3/23 = $150.00
Pre-tax base = $1,150.00 − $150.00 = $1,000.00
The fraction 3/23 is the simplified form of 15/115. Because New Zealand’s GST rate is 15%, the tax-inclusive price always equals 115% of the base. Dividing the rate (15) by the inclusive multiplier (115) gives 15/115, which reduces to 3/23. This single-step multiplication is faster and avoids the intermediate subtraction step that introduces floating-point rounding differences on high-volume invoice runs.
Rounding rules for IRD compliance
Per the IRD’s official guidance on working out GST, amounts must be rounded to the nearest cent — if the third decimal is 5 or above, round up. Our tool applies this automatically on every entry. For a business processing 200 receipts a month, even a 1-cent rounding discrepancy per transaction adds up to $24+ per year in filing differences.
Four reverse-calculation mistakes that trigger IRD penalties
These errors surface repeatedly in IRD audits. Each one starts with a simple arithmetic slip on a receipt and snowballs into a shortfall assessment.
1. Subtracting 15% instead of dividing by 1.15
A $1,150 invoice: subtracting 15% gives $977.50, but the correct pre-tax base is $1,000.00. That $22.50 error per invoice compounds across hundreds of transactions each year. Over-claiming input credits by this margin triggers a 20% shortfall penalty on the excess.
Typical exposure: $500–$3,000+ per filing period2. Claiming input credits on exempt purchases
Residential rent, bank fees, insurance premiums, and donated goods carry no GST. Reverse-calculating a “tax portion” from these amounts and entering it on your return creates a false credit. Section 14 of the GST Act lists every exempt category — check before you claim.
Penalty: 20% shortfall + use-of-money interest3. Rounding inconsistently across a batch
Rounding each line item down instead of to the nearest cent creates a systematic underpayment. Over a 200-invoice batch, even half-cent differences accumulate to a material discrepancy that IRD’s automated matching picks up during return processing.
Risk: return flagged for manual review + interest4. Ignoring the change-of-use adjustment rules
You buy a $11,500 asset for business use, claim the full $1,500 input credit, then start using it 40% personally. Section 21 of the GST Act requires you to repay a proportional amount — in this case $600. Missing this adjustment triggers automatic penalties when IRD cross-references your asset register.
Risk: proportional clawback + penaltiesTax-inclusive vs. tax-exclusive pricing — what the law requires
Understanding this distinction prevents the most expensive quoting mistake in New Zealand business.
Tax-inclusive (shelf price)
The 15% is already baked in. Under the Fair Trading Act 1986, any price displayed to consumers in NZ must include GST. This is the number on receipts, shelf labels, and online checkout totals.
Tax-exclusive (trade price)
The base cost before tax. B2B quotes often use exclusive pricing because both parties are GST-registered and can claim input credits. The tax is itemised separately on the invoice.
Why this distinction matters for your invoices
If you quote “$5,000” to a client without specifying “plus GST”, the Fair Trading Act presumes the price is inclusive. That means you absorb $652.17 in output tax — money you must still remit to IRD. On a $5,000 job, that reduces your actual revenue to $4,347.83. Always state “plus GST” or “excl. GST” in writing to avoid this costly misunderstanding.
Second-hand goods — a hidden input credit opportunity
When you purchase second-hand goods from a private (non-registered) seller for $200 or more, the GST Act allows you to claim an input tax credit as if GST were included. Use the 3/23 fraction on the purchase price. For example, if you buy a used commercial oven from a private seller for $4,600, the claimable input credit is $4,600 × 3 ÷ 23 = $600.00. This provision exists under section 3A(1)(c) of the GST Act and is often overlooked by small business owners.
Invoice basis vs. payments basis — when to reverse-calculate
The accounting basis you have elected with IRD determines when you use this tool — on invoice date or when money changes hands.
| Factor | Invoice basis | Payments basis |
|---|---|---|
| When GST is accounted for | Date the invoice is issued or received | Date payment is made or received |
| Who can elect this basis? | Any GST-registered business (mandatory above $24M) | Businesses with taxable supplies under $2M per year |
| When to reverse-calculate | When you receive a supplier invoice, regardless of payment | When you actually pay the invoice or receive payment |
| Cash flow advantage | None — you remit tax before receiving payment | Significant — you remit tax only after money arrives |
| Best suited for | Large businesses, fast collection cycles | Sole traders, contractors, delayed payment terms |
Most sole traders and small contractors elect the payments basis because it avoids remitting GST on invoices that haven’t been paid yet. If you are unsure which basis you are on, check your GST registration details in myIR.
Our three-step verification process
Transparency about how we build, test, and maintain every calculation on this site.
Every calculation on GSTCalc.nz goes through three verification steps before going live:
Legislative cross-check
All tax logic is verified against the GST Act 1985 and current IRD Tax Information Bulletins. Updated within 4 hours of any legislative change.
Expert review
Content and calculations are reviewed by GSTCalc Editorial Team. Credentials verified on our About page.
Automated testing
50+ automated unit tests run on every update, comparing outputs against IRD-published worked examples. Edge cases — zero values, very large amounts, rounding boundaries — are all validated.
What we are: A precision extraction tool built by engineers and verified by NZ tax professionals. We provide mathematically correct pre-tax breakdowns for your receipts and invoices.
What we are not: A substitute for professional tax advice. For complex situations — multi-entity structures, IRD disputes, property transactions — consult a registered tax agent. If you find an error in any calculation, email contact@gstcalc.nz immediately.
Frequently asked questions about reversing GST
Practical answers to the questions Kiwi business owners encounter when working backwards from inclusive totals. Verified against current IRD guidance.
How do I strip GST from a receipt total?
Divide the receipt total by 1.15. For a $172.50 receipt, the pre-tax base is $150.00 and the tax portion is $22.50. This works because NZ GST at 15% means the inclusive price is always 1.15 times the exclusive price. Alternatively, multiply by 3/23 to extract just the tax portion: $172.50 × 3/23 = $22.50.
The 3/23 fraction is the IRD-prescribed method for extracting just the tax portion from an inclusive amount. Multiply the total by 3, then divide by 23. For example, $230 × 3 ÷ 23 = $30 tax portion. Use it whenever you need only the tax figure for your return — it avoids a two-step division-then-subtraction process and reduces rounding errors on high-volume batches.
Because the 15% was applied to the smaller pre-tax base, not the inclusive total. Subtracting 15% from $115 gives $97.75 — but the correct base is $100. The tax was 15% of $100, not 15% of $115. Always divide by 1.15 or use the 3/23 fraction instead. This is the single most common arithmetic mistake identified in IRD audits of small businesses.
Yes. If you are GST-registered and purchase second-hand goods from a non-registered seller for $200 or more, you can claim an input tax credit under the second-hand goods provisions of the GST Act. Use the 3/23 fraction on the purchase price to calculate the claimable amount. For example, a $4,600 used commercial oven yields a $600 input credit ($4,600 × 3/23).
For assets used partly for business and partly for personal purposes, you can only claim the business-use percentage of the GST. First extract the full tax using this tool, then multiply by your business-use percentage. For example, if a $1,150 laptop is used 70% for business, the claimable input credit is $150 × 70% = $105.00.
Yes. All results are rounded to the nearest cent following IRD guidance — if the third decimal place is 5 or above, the amount rounds up. This matches the rounding rule published in IRD Tax Information Bulletins and eliminates the cumulative rounding errors that spreadsheet formulas often introduce.
Invoice basis means you account for GST when you issue or receive an invoice, regardless of payment. Payments basis means you account for GST only when money changes hands. Businesses under $2M turnover can choose payments basis. This affects when you use the reverse calculation — on invoice date or payment date. Most sole traders elect payments basis for cash flow benefits.
When a trade-in is involved, GST applies to the full sale price, not the net amount after trade-in. If you sell a vehicle for $23,000 including a $5,000 trade-in, GST is calculated on the full $23,000. The tax portion is $23,000 × 3 ÷ 23 = $3,000, and the pre-tax base is $20,000. The trade-in value is a separate transaction for GST purposes.
Need to work with GST in the other direction?
Free tools for every Kiwi business owner — no sign-up required.
Reverse GST Extraction Report
Tax breakdown summary · New Zealand · GSTCalc.nz
This report was generated by gstcalc.nz — New Zealand’s free reverse GST extraction tool, verified by qualified NZ tax professionals.
All calculations use the standard 15% GST rate and the official IRD 3/23 fraction method. Amounts rounded to the nearest cent per IRD guidelines.
Disclaimer: This document is provided for informational and record-keeping purposes only. It does not constitute financial or tax advice. Verify figures with a qualified accountant or registered tax agent before filing.
Generated: