# 15% gst

Discussion in 'Living Room' started by moyjos, 1st Nov, 2015.

Join Australia's most dynamic and respected property investment community
1. ### moyjosWell-Known Member

Joined:
18th Jun, 2015
Posts:
285
Location:
Sunshine Coast
without all the "should we or shouldn't we" have a 15% gst

my question is...what is the backwards calculation for a 15% gst?
eg 10% gst \$100 +10% = \$110 backwards...\$110 -(110/11) = \$100

I thought the logical was 12.5%gst because it's reverse was divide x 9
\$100 +12.5% = \$112.5 backwards...\$112.5 -(112.5/9) = \$100

so....100 +15% = \$115 backwards....\$115-(115/ x ) = 100

I come up with 7.66666666666 ????? surely it will not be that cumbersome??

aggghhh my bookeeping OCD will HATE this if my books are out by a few cents

2. ### D.T.Specialist Property ManagerBusiness Member

Joined:
13th Jun, 2015
Posts:
8,016
Location:
moyjos likes this.
3. ### Charlotte30Well-Known Member

Joined:
18th Jun, 2015
Posts:
68
Location:
Christchurch, New Zealand
In NZ we take GST figure divide by 23 and multiply by 20 eg 115/ 23 x 20 = 100. Bit more convoluted than 10% but it works.

4. ### moyjosWell-Known Member

Joined:
18th Jun, 2015
Posts:
285
Location:
Sunshine Coast
Oops sorry, I replied to this last night and lost the post

Thanks for those answers, I was getting so hung up on the "divide by" number I could not see the other answers.

5. ### spludgeyWell-Known Member

Joined:
18th Jun, 2015
Posts:
1,189
Location:
Sydney
I've seen people do these calculations, but it's never made sense to me. Why don't you just divide by (1+GST)?

6. ### moyjosWell-Known Member

Joined:
18th Jun, 2015
Posts:
285
Location:
Sunshine Coast
Yes that is the link D.T posted

If we assume that VAT is at a rate of 15%...
Gross price divided by 1.15 = Net price
Price after tax divided by 1.15 =
Price before tax

or in fractional form (which is Charlottes answer)
Price after tax divided by 23/20 = Price before tax.

7. ### spludgeyWell-Known Member

Joined:
18th Jun, 2015
Posts:
1,189
Location:
Sydney
But is it really easier to type "*23/20" instead of "/1.15"?

Feels like American betting odds to me...

8. ### Scott No MatesWell-Known Member

Joined:
18th Jun, 2015
Posts:
11,224
Location:
Sydney or NSW or Australia
Whole numbers for the dummies.

One pollie this morning said there'd be more \$ for xy&z. I laughed at his lack of understanding of the gst, it is a State tax collected by the Fed's and returned to the states.

If anything, it will allow the feral gummint to redistribute its own budget allocations.

9. ### AzazelWell-Known Member

Joined:
18th Jun, 2015
Posts:
8,111
Location:
Brisbane
Hope it doesn't go through, I remember most things went up by more than 10% when they 1st brought in the GST.

10. ### D.T.Specialist Property ManagerBusiness Member

Joined:
13th Jun, 2015
Posts:
8,016
Location:
I'd prefer there to be more GST and balanced by equal cuts in other taxes.

11. ### dattoWell-Known Member

Joined:
23rd Jun, 2015
Posts:
2,352
Location:
Mt Druuiitt
A GST increase will only create more full-on bogans.

At the moment there are people tinkering on the bogan threshhold.

A sudden increase in their cost of living and whammo, they turn into a bogan. I've seen it happen.

Last edited: 2nd Nov, 2015
Blacky and Brian84 like this.
12. ### Scott No MatesWell-Known Member

Joined:
18th Jun, 2015
Posts:
11,224
Location:
Sydney or NSW or Australia
Really? And you didn't report it to the ACCC?

13. ### Peter_TersteegFinance broker and strategistBusiness Member

Joined:
18th Jun, 2015
Posts:
3,649
Location:
Melbourne, Nationwide
Currently with GST at 10% you divide the full cost by 1.10 to get the base cost.

If GST becomes 15% you'd divide the full cost by 1.15 to get the base cost.

If GST becomes 22% you'd divide the full cost by 1.22 to get the base cost.

The equation is:
Base cost x (100% + GST%) = Full cost
- or -
Base cost = Full cost / (100% + GST%)

Roughly year 8 level algebra.

BKRinvesting and spludgey like this.
14. ### moyjosWell-Known Member

Joined:
18th Jun, 2015
Posts:
285
Location:
Sunshine Coast
the calculation to find the GST component just becomes a two part equation with 15% where as now it just a "divide by 11 for get the gst component"

Gst component will be
gst = gross cost - (gross/1.15)

no biggie, just getting my head straight.

15. ### Peter_TersteegFinance broker and strategistBusiness Member

Joined:
18th Jun, 2015
Posts:
3,649
Location:
Melbourne, Nationwide
The problem is people have been taught to think in fractions rather than percentages. It's a throwback to when we used pounds and shillings as our currency and feet and miles as distance.

You can think, "divide by 11 and multiply by 10", but that only works when the numbers are convenient. It become a complete mess if the GST component become 11.624%.

If you think in percentages then the conversion is simply multiplying or dividing by 1.11624.

The solution is very simple, but 3 generations on and our schools and even our language is still imparting a completely redundant and very inaccurate way of doing mathematics.

Some kids figure this out in early high school and go on to become engineers, scientists, physicists, etc. Those who don't have that light bulb moment in year 8 tend to drop maths at the first opportunity.

16. ### geoffwModeratorStaff Member

Joined:
15th Jun, 2015
Posts:
4,268
Location:
Canberra
If you're doing these calculations in a spreadsheet, don't forget to round the result each time. Otherwise totalling a number of calculated fields may not appear to give the excat result.

17. ### Simon HampelFounderStaff Member

Joined:
3rd Jun, 2015
Posts:
3,277
Location:
Sydney
I was a bit distressed to learn that my son (year 1) is being told "getting the correct answer isn't as important as understanding the process" in maths.

To which I respond - if you aren't getting the correct answer, you don't understand the process!

This isn't social studies - there is ALWAYS a correct answer in maths (see note 1)

(Note 1 - rounding errors notwithstanding - also see note 2)
(Note 2 - there is also room for interpretation in the conventions of order of operations which may lead to differences in what is understood to be the correct answer - also see note 3)
(Note 3 - don't get me started on non-algebraic maths - also see note 4)
(Note 4 - complex numbers? unrepresentable values? etc etc?)

Ted Varrick likes this.
18. ### spludgeyWell-Known Member

Joined:
18th Jun, 2015
Posts:
1,189
Location:
Sydney
I'm yet to see a year 1 that gets all questions right every time, even if they understand the process.

I would wholeheartedly agree with the statement that the process is more important. If you know that 3+4=7 then that's great, but the solution of 4+3 might still be a complete mystery to you if you don't understand the process.

19. ### Corey BattFinance StrategistBusiness Plus Member

Joined:
14th Jun, 2015
Posts:
2,037
Location:

Good ol' Tom Lehrer "and that leaves fives... well six actually but the idea is the important thing"

Simon Hampel likes this.
20. ### SpannaWell-Known Member

Joined:
14th Jul, 2015
Posts:
84
Location:
Port Hedland
The process is the important part not the answer.
Granted if you get 100% of the process correct you get the correct answer, but if you get 99% of the process correct and 1% wrong you get the wrong answer.

Trust me if you failed a question based on the answer the majority of people would fail all Maths based tests.

Conversely you can get every answer wrong in an exam and still get a high distinction!