Sometimes, customers notice that the GST amount on their invoice is slightly higher than exactly 10% of the total before GST. This is not an error — it happens because of the way our billing system calculates and rounds GST for itemised invoices.
Our billing platform calculates GST using these steps:
Per Item Calculation – GST is calculated at 10% for each individual taxable line item on your invoice.
Rounding – Each GST amount is rounded to two decimal places (the standard for currency in Australia).
Summing – All the rounded GST amounts are then added together to produce the total GST on the invoice.
When there are many taxable items, these small rounding adjustments can add up.
For example:
If GST for a line item is calculated as $0.104, it is rounded to $0.10.
If GST for another line item is $0.105, it is rounded to $0.11.
Over dozens or hundreds of items, the difference between “GST on the total” and “sum of GST per line” can become noticeable, sometimes a few cents higher.
Total ex-GST: $2,132.12
10% of total (calculated once): $213.21
GST on invoice (sum of line-by-line GST): $213.62
Difference: $0.41
This difference comes from rounding the GST per item and then adding the rounded amounts together.
The Australian Taxation Office (ATO) allows GST to be calculated on a per-item basis and rounded for each line, as long as it is done consistently. Our billing system follows this method for accuracy in itemised billing and compliance with tax rules.