# GST calculation for a $1,100 GST-inclusive invoice

## Answer

- **(a) GST amount included in the invoice: $100**
- **(b) GST-exclusive price: $1,000**

## Working

In Australia, GST is applied at a standard rate of 10% on the GST-exclusive price. This means a GST-inclusive total is 110% (i.e. 1.1x) of the GST-exclusive price.

**Step 1 - Extract the GST amount.**
The standard shortcut for backing GST out of a GST-inclusive amount is to divide by 11:

$$\text{GST} = \frac{\$1{,}100}{11} = \$100$$

This works because the GST ($10\%$ of the base) is one-eleventh of the GST-inclusive total ($110\%$ of the base): $\frac{10}{110} = \frac{1}{11}$.

**Step 2 - Find the GST-exclusive price.**
Subtract the GST from the total:

$$\$1{,}100 - \$100 = \$1{,}000$$

Equivalently, divide the inclusive total by 1.1: $\frac{\$1{,}100}{1.1} = \$1{,}000$.

**Check:** $\$1{,}000 \times 10\% = \$100$ GST, and $\$1{,}000 + \$100 = \$1{,}100$ inclusive. Confirmed.

## Note on approach

This is the standard Australian Tax Office "divide by 11" method for extracting GST from a GST-inclusive price at the 10% standard rate. The two figures are internally consistent: the GST-exclusive price ($1,000) plus the GST ($100) equals the stated invoice total ($1,100). This is a benchmarking hypothetical, not tax advice.