View Full Version : Net of GST

Bryan

26-09-2010, 10:14 AM

With 12.5% gst, if you divide the gross by 9 you get net of GST.

Now we are going onto 15%, what do you divide by now?

IRD says, multiple by 3 and divide by 23. Shishhhhhh! must be an easier factor.

Anyone got any idea please?

WalOne

26-09-2010, 10:21 AM

Good question - I don't know there is any easy way around it.

But I recall that the reason 12.5% was chosen was that it was the simplest whole number calculation. :2cents:

Battleneter2

26-09-2010, 10:28 AM

X the price by 1.125 is the correct and fastest way to calc current GST

X the price by 1.15 for new GST

So $100 x 1.15 = $115

gary67

26-09-2010, 10:29 AM

I think it is calculated on the one leg and both arms theory

pctek

26-09-2010, 10:38 AM

With 12.5% gst, if you divide the gross by 9 you get net of GST.

Now we are going onto 15%, what do you divide by now?

?

Sure. Deduct 15%. It's so easy you don't need any weird divide by anythings.

15% off goods sold at $100 +GST ($115) - does not go back to $100.

Ken

7.66666666 You need 8 6's to get the required precision.

Jayess64

26-09-2010, 11:57 AM

Oh boy! What does this say about the standard of math education in NZ!!

SoniKalien

26-09-2010, 12:06 PM

Isn't that what calculators are for? :p

pcuser42

26-09-2010, 01:16 PM

15% off goods sold at $100 +GST ($115) - does not go back to $100.

Ken

115 / 1.15 = 100 :)

Erayd

26-09-2010, 01:24 PM

115 / 1.15 = 100 :)

Of course ;). That's not what Ken was saying though - he was pointing out that 115 - (115 * 0.15) != 100.

Snorkbox

26-09-2010, 01:24 PM

(115 - 15%) = 17.25 :)

Erayd

26-09-2010, 01:26 PM

(115 - 15%) = 17.25 :)

That's not right. 115 - 15% = 115 - (115 * 0.15) = 97.75.

Perhaps what you meant was 115 * 15% = 115 * (115 * 0.15) = 17.25?

Note that neither of these is a correct GST calculation for a net price of 100.

spaceman8815

26-09-2010, 01:30 PM

ok, forget what I said. it was only off the top of my head.

Erayd

26-09-2010, 01:33 PM

To calculate the GST price use the formula:

<price>/(1-0.15) or <price>/0.85

eg. 100/0.85 = $117.65

then 117.65 - (117.65*0.15) = 100Hate to break it to you Spaceman8815, but both of those calculations are utterly wrong.

The correct way of calculating GST (as noted by Pcuserwinvista above) is:

net * 1.15 = GST incl., e.g. $100 * 1.15 = $115.

GST incl. / 1.15 = net, e.g. $115 / 1.15 = $100.

To obtain just the GST portions, use the following:

net * 0.15 = GST, e.g. $100 * 0.15 = $15.

GST incl. * 3 / 23, e.g. $115 * 3 / 23 = $15.

If you prefer working in decimal only, you can replace 3/23 in the above equation with 0.1304347826087. Whether that's such a good idea is an entirely different story - in most cases, you'd have to be some kind of masochist to use an unwieldy number like that for something as simple as a GST calculation - most people like to remember these!

Snorkbox

26-09-2010, 01:42 PM

That's not right. 115 - 15% = 115 - (115 * 0.15) = 97.75.

Perhaps what you meant was 115 * 15% = 115 * (115 * 0.15) = 17.25?

Note that neither of these is a correct GST calculation for a net price of 100.

I was aware neither was correct but was demonstrating Kenj was correct with what he said.

http://www.onlineconversion.com/percentcalc.htm

If you type 15 in the percent and 115 in this calculator you end up with 17.25 which is patently NOT the Net GST content.

I hope this makes it more clear what I meant.

Erayd

26-09-2010, 01:45 PM

Oh I know what you meant Snorkbox, I was just correcting the math. As the result still wasn't a valid GST calculation, I thought I'd better make it clear in my post as well, lest some unsuspecting member might decide to use it as such :).

lakewoodlady

26-09-2010, 01:57 PM

100 + 15% = 115

115 - 15% = 97.75 (don't ask me why)

LL

Snorkbox

26-09-2010, 02:03 PM

Perhaps I should have said 15% OF 115 is 17.25. :)

Erayd

26-09-2010, 02:05 PM

Perhaps I should have said 15% OF 115 is 17.25. :)Yep :D.

Erayd

26-09-2010, 02:08 PM

...don't ask me why...

The reason is because in the first instance, you're adding 15% of 100 (i.e. 15), and in the second instance you're subtracting 15% of 115 (i.e. 17.25). As 15% of 115 isn't the same thing as 15% of 100, that's what causes the incorrect answer. This is the same thing that Snorkbox was pointing out before.

WalOne

26-09-2010, 02:15 PM

As 15% of 115 isn't the same thing as 15% of 100, that's what causes the incorrect answer.

Don't you mean, correct answer? (your example is correct - that 15% of 100 is not the same as 15% 0f 115)

I was just pointing out that pctek was wrong :2cents:

Ken

Erayd

26-09-2010, 02:17 PM

Don't you mean, correct answer? (your example is correct - that 15% of 100 is not the same as 15% 0f 115)Touche... mathematically correct, but incorrect as a GST calculation.

mikebartnz

26-09-2010, 02:40 PM

7.66666666 You need 8 6's to get the required precision.

I found it to be 7.66666666666 which is 11 6's. That takes it to a decimal precision of 10. For most occasions 8 would be enough but over time those extra three would make a difference.

My reason for knowing that figure is so that I don't have to change a program I wrote ages ago as a calculator with specific GST that would stay on top of all other windows. My brother finds it very useful.

FoxyMX

26-09-2010, 04:18 PM

Oh boy! What does this say about the standard of math education in NZ!!

Nothing wrong with my math education but it's a case of if you don't use it you lose it. :rolleyes:

After reading all this it seems to me that the IRD method is the easiest after all.

lakewoodlady

26-09-2010, 09:49 PM

The reason is because in the first instance, you're adding 15% of 100 (i.e. 15), and in the second instance you're subtracting 15% of 115 (i.e. 17.25). As 15% of 115 isn't the same thing as 15% of 100, that's what causes the incorrect answer. This is the same thing that Snorkbox was pointing out before.

Thanks for that, I have never been good with maths. When I went to school, it wasn't considered important for girls to learn it much. :blush:

LL

pine-o-cleen

26-09-2010, 10:41 PM

Should we just round it up and make GST 20% :p

beeswax34

27-09-2010, 12:00 AM

Should we just round it up and make GST 20% :p

Or down to 10%!

Chilling_Silence

27-09-2010, 09:46 AM

Just use Xero, it takes care of it all, and always quote +GST ;)

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