Do you always quote price plus GST (Tax)?

Last updated by Billy Terblanche [SSW] over 1 year ago.See history

Is your price:

  • $100 per hour + GST (the $100 being the amount exclusive of GST)
  • $110 per hour (the $110 being the total amount)

We say the first one. When providing quotes to prospects/clients, it is always better to display the net value + 10% GST rather than the total.

The reasons for this are:

  • It avoids any confusion as to whether GST is included.
  • This net amount is the REAL cost to the customer, as they get the tax back (in Australia).
  • The net value is lower and appears more attractive to the client.
  • The 10% GST charged to the client is not income for your company. In Australia, we collect this 10% on behalf of the Australian Taxation Office.
  • The client will receive back this 10% GST from the Australian Tax Office when they do their quarterly BAS/GST Return.

The total fixed price total is $AUD 66,000 - please find quote attached.

Figure: Bad example - GST is not mentioned

The total fixed price total is $AUD 60,000 + GST (10%). Please find quote attached.

Figure: Good example - net amount + GST

Note #1 : SSW and other Australian companies do not charge GST to external clients outside of Australia.

Note #2 : This only applies for business to business transactions. When selling goods or services to individuals for domestic or personal use in Australia, prices must be quoted inclusive of GST as per the Competition and Consumer Act 2010.

While you are writing out a quote, make sure you know when to use a round or exact figure.

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