GST on expenses¶

Understanding how GST works on your business expenses.

How it works¶

In FairBooks, expense amounts are entered GST-inclusive. The GST component is then shown separately.

For a standard GST expense:

• Amount: $110.00 (total paid)
• GST Component: $10.00 (the GST portion)

GST fills in automatically¶

You do not have to work the GST out yourself. When you enter the amount, FairBooks calculates the GST as one eleventh of it. The figure also follows the account you choose: each account in your chart of accounts has a tax treatment, and accounts that are GST-free (such as bank fees and some insurance) set the GST to $0 for you.

The auto-filled figure is only a default. If a particular expense needs a different GST amount, type over it.

Impact on BAS¶

GST claimed on expenses reduces your GST liability in your BAS report. FairBooks uses cash basis accounting, so only expenses with a paid date within the BAS period are included.

Bills and expenses¶

An unpaid bill is not part of your GST or income figures yet. When you mark a bill as paid, FairBooks creates a matching expense dated to the payment. That expense is what appears in your BAS and Profit and Loss, so the GST is counted when you actually paid, in line with cash basis.

See BAS reports for more details.