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Calculate your GST credits

Last updated 31 October 2022

Work out how to calculate your GST credits.

Amount of GST credit

When using annual private apportionment, you can claim a credit for the GST on all purchases with a business-related component, then make an annual adjustment.

Example: Amount of GST credit

George lodges his activity statement on a quarterly basis and has chosen to use annual private apportionment.

George purchases telephone services from a local telephone company. He pays $220 for these services (including $20 GST) and receives a tax invoice on the day of purchase. He anticipates his phone use will be 30% business and 70% private. The business component does not relate to making input-taxed supplies.

George claims a $20 GST credit for the purchase on the first activity statement he lodges after purchasing the services.

If George had not chosen to use annual private apportionment, he would only be entitled to a GST credit of $6 (30% of $20).

As George has claimed a $20 GST credit, he will need to make an increasing adjustment on a future activity statement.

End of example

Input-taxed sales

If a business-related purchase partly relates to making input-taxed sales, use the following formula to work out the amount of GST credit you can claim:

(Full GST credit) × (Extent of the non-input-taxed purpose %) × (Extent of payment %)

In this formula:

  • Full GST credit is the amount of GST credit you would be able to claim if    
    • you made the purchase solely for business purposes
    • you provided (or were liable to provide) all of the payment for the purchase
    • the purchase did not relate to making input-taxed supplies.
  • Extent of the non-input-taxed purpose is the portion of the purchase that does not relate to making input-taxed supplies, expressed as a percentage of the total purchase.
  • Extent of payment is the amount you pay (or are liable to pay) for the purchase, expressed as a percentage of the total purchase price.

Example: Amount of GST credit if the purchase relates to making input-taxed supplies

Maya has several businesses, one of which involves renting out residential premises. She has chosen to use annual private apportionment.

Maya purchases telephone services from a local telephone company. She pays $220 for these services including $20 GST and she pays the full purchase price. Maya anticipates she will use the services for:

  • regular business activities (30%)
  • private purposes (55%)
  • her renting out of residential premises (15%).

Maya's GST credit must take into account the proportion that relates to renting out her residential property so she uses the formula:

(full GST credit) × (extent of the non-input-taxed purpose) × (extent of payment)

$20 × 85% × 100% = $17

Maya can claim a GST credit of $17.

If Maya had not chosen to use annual private apportionment, she would only be able to claim a GST credit of $6 (30% of $20). Maya will need to make an increasing adjustment on a future activity statement because she has claimed a $17 GST credit.

End of example

Importations

Annual private apportionment applies to importations in a similar way as it does to purchases. To calculate the amount of the GST credit you can claim for an importation you make partly for business and private purposes, use the following formula:

(Full GST credit) × (Extent of the non-input-taxed purpose %)

In this formula:

  • Full GST credit is the amount of the GST credit you would be able to claim if the importation:    
    • was solely for business purposes
    • did not relate to making input-taxed supplies.
  • Extent of non-input-taxed purpose is the portion of the importation that does not relate to making input-taxed supplies, expressed as a percentage of the total of the importation.

The amount you pay or are liable to pay for the importation is not relevant. If you make input-taxed financial supplies as a minor part of your business, you can apply annual private apportionment to your importations that relate to, making those supplies as long as you do not exceed the financial acquisitions threshold.

For more information about importations, see:

Cars

If you purchase a car, the GST credit you can claim is limited to one-eleventh of the car limit for depreciation.

Insurance

If you make a claim under an insurance policy, you must advise the insurer of the amount of GST credit you can claim for the insurance premium. This allows the insurer to work out their entitlement to claim an adjustment that may arise, on any settlement of a claim under your insurance policy.

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