GST-Inclusive vs GST-Exclusive Pricing: What’s the Difference?

 

Understanding the difference between GST-inclusive vs GST-exclusive pricing is essential for any business operating in Australia. Whether you sell products, provide services, or manage invoices, knowing the difference between GST-inclusive and GST-exclusive prices ensures accurate billing, legal compliance, and clear communication with customers. GST, or Goods and Services Tax, is a 10% tax applied to most goods and services in Australia. 

Some businesses display prices that already include GST, while others list prices before tax is added. This guide will break down the key differences, provide practical examples, and explain how to correctly apply GST in various business scenarios.

What is GST Inclusive Pricing?

GST inclusive pricing refers to prices that already include the 10% Goods and Services Tax (GST). This means the amount a customer sees is the total they will pay, with no additional GST added at the point of sale. For many retail businesses and service providers in Australia, this approach simplifies transactions and improves transparency.

In other words, the GST inclusive meaning in Australia is that the GST component is embedded within the displayed price. For example, if a product is listed at $110 GST-inclusive, $10 of that amount is GST, and $100 is the base price. This method ensures customers are aware of the total cost upfront and helps businesses comply with display prices inclusive of GST rules. Advantages of GST-inclusive pricing include easier marketing, clear invoicing for consumers, reduced confusion at checkout, and a clear understanding of GST-inclusive vs GST-exclusive pricing.

What is GST Exclusive Pricing?

GST exclusive pricing refers to prices that do not include the 10% Goods and Services Tax (GST). In this approach, the GST is added separately at the point of sale or on the invoice. This method is commonly used in B2B transactions, wholesale pricing, and professional services where businesses need to clearly show the tax component.

The GST exclusive meaning in Australia is that the displayed price represents only the base amount, and GST is calculated on top of that price. For example, a service priced at $100 GST-exclusive would have $10 GST added, resulting in a total of $110 GST-inclusive.

Benefits of GST-exclusive pricing include clear accounting for tax reporting, easier calculations for business clients who can claim GST credits, and transparent separation of product or service cost from tax obligations.

GST Inclusive vs Exclusive: Key Differences

Understanding the difference between GST-inclusive vs GST-exclusive pricing is crucial for both businesses and consumers. The main difference lies in whether the 10% Goods and Services Tax (GST) is included in the displayed price or added separately.

Key Differences:

Feature	GST-Inclusive	GST-Exclusive
Price Displayed	Includes GST	Excludes GST
Customer Awareness	Total price visible upfront	GST added at checkout or invoice
Common Use	Retail, direct-to-consumer sales	B2B, wholesale, professional services
Accounting	Simple for consumers	Easier for businesses claiming GST credits

For example, a product priced at $110 GST-inclusive contains $10 GST, whereas the same product at $100 GST-exclusive will have $10 added at checkout. By understanding these differences, businesses can decide the most suitable pricing strategy while remaining compliant with Australian tax regulations. You can find GST- Inclusion and GST-Exclusion prices with our GST- Inclusion and GST-Exclusion pricing finder.

Inclusive vs Exclusive Price Example

To better understand the difference between GST-inclusive and GST-exclusive pricing, consider the following inclusive vs exclusive price example:

• • GST-Inclusive Price: A retail product is listed at $110. This price already includes 10% GST, meaning $100 is the base price and $10 is the GST component. Customers pay $110 in total with no additional calculations needed.

• • GST-Exclusive Price: The same product is listed at $100 GST-exclusive. At the point of sale, $10 GST is added, resulting in a total of $110. Here, the base price and GST are shown separately, which is common in invoices for businesses.

How to Show GST on an Invoice in Australia

Properly displaying GST on invoices is essential for compliance with Australian tax laws. Businesses must indicate the GST component when issuing invoices, especially when using GST-exclusive pricing.

To show GST on an invoice in Australia, include the following details:

• • The total GST-inclusive amount or GST-exclusive base price

• • The GST amount is calculated separately (at 10%)

• • A statement that the price includes or excludes GST

Example:

Item	Price (GST-Exclusive)	GST (10%)	Total Price
Consulting Service	$500	$50	$550

This ensures transparency for clients and helps businesses comply with the Australian Taxation Office (ATO) reporting requirements. Clearly showing GST on invoices also simplifies accounting and allows business clients to claim GST credits where applicable.  Use our calculator to determine GST on Australian goods.

Pricing with GST vs Without GST

When setting prices, businesses often face the choice between pricing with GST vs without GST. The decision affects both customer perception and accounting practices.

Pricing with GST: 

The displayed price already includes the 10% GST. This approach is common in retail and consumer-facing businesses because it provides clarity to customers; what they see is what they pay. It simplifies marketing, checkout, and avoids confusion about additional charges.

Pricing without GST: 

The base price excludes GST, and the 10% tax is added at the point of sale or on invoices. This method is preferred for B2B transactions, wholesale, and professional services, as it separates the product/service cost from the tax, making it easier for businesses to calculate GST credits.

Display Prices Inclusive of GST Rules

In Australia, businesses must comply with regulations on how prices are displayed to consumers. The display prices, inclusive of the GST rule, require that any price shown to the public include the 10% GST for most goods and services. This ensures transparency, avoids misleading customers, and helps businesses correctly manage GST-inclusive vs GST-exclusive pricing.

Key points to follow:

• • All advertised prices must include GST unless clearly stated otherwise.

• • Online, in-store, and catalog prices should reflect the total amount customers will pay.

• • Businesses using GST-exclusive pricing must indicate that GST will be added at checkout or on the invoice.

Following these rules helps businesses remain compliant with the Australian Taxation Office (ATO) and fosters trust with customers. Correctly displaying prices also reduces confusion and improves the overall shopping experience.

Conclusion

Understanding the difference between GST-inclusive vs GST-exclusive pricing is crucial for businesses in Australia to ensure compliance, accurate billing, and clear communication with customers. GST-inclusive pricing shows the total amount including tax, while GST-exclusive pricing separates the base price and GST component. Both approaches have advantages depending on whether you are dealing with retail customers or business clients.

By knowing the GST inclusive meaning of Australia and the GST exclusive meaning of Australia, following examples of inclusive vs exclusive price, and correctly applying rules to show GST on invoices in Australia or display prices inclusive of GST rules, businesses can make informed pricing decisions. Whether you are comparing pricing with GST vs without GST or deciding how to structure invoices, mastering these concepts builds trust, simplifies accounting, and ensures compliance with the Australian Taxation Office (ATO).