• Simplified GST accounting methods

    All five simplified GST accounting methods are explained in full in the guide Simplified GST accounting methods. The following table summarises the five methods:

    Five methods at a glance

    Method

    Business norms

    Stock purchases

    Snapshot

    Sales percentages

    Purchases snapshot

    Turnover threshold

    SAM turnover of $2 million or less

    SAM turnover of $2 million or less

    SAM turnover of $2 million or less

    GST turnover of $2 million or less

    GST turnover of $2 million or less

    How you estimate your GST-free sales and purchases

    You apply standard percentages to your sales and purchases.

    You take a sample of purchases and use this sample.

    You take a snapshot of your sales and purchases and use this.

    You work out what percentage of GST-free sales you made in a tax period and apply this to your purchases.

    You work out what percentage of GST-free purchases you made in a four-week sample period and apply this to your purchases for six months.

    These methods help you work out the information you need to correctly complete the GST section of your activity statement. However, they can only be applied to sales and purchases of trading stock. If you decide to use a simplified GST accounting method, you will still need to separately consider other sales (such as non-stock or capital items) and expenses (such as rent, phone and any capital items) when you complete your activity statement.

    There is another option under both the stock purchases and snapshot methods, known as the '5% GST-free stock estimation basis'. This option is explained in the guide Simplified GST accounting methods. If you choose this option, you just follow the instructions for the stock purchases method or the snapshot method (whichever you have chosen) when you fill in your activity statement.

      Last modified: 20 May 2014QC 19057