Methodology
New Zealand GST-aware Pricing Planner methodology
Educational only: Business decision support, not accounting, tax or legal advice.
Privacy: Calculations run locally; Margin101 does not receive your commercial inputs.
Update policy: Reviewed when formulas or official dependencies change.
Scope: New Zealand small-business planning using your own assumptions.
1. Formulas and units
Recoverable input GST: Cₑ = C ÷ (1 + tᵢ) when C is tax-inclusive, otherwise Cₑ = C. Non-recoverable input GST: Cₑ = C when C is tax-inclusive, otherwise Cₑ = C × (1 + tᵢ).Where
- C
- Entered cost on the selected GST basis (NZD per unit)Source: Business record
- Cₑ
- Effective cost after recoverability treatment (NZD per unit)Source: Calculated output
- tᵢ
- Confirmed input GST rate on the cost (decimal rate)Source: Business record
Pₑ = Cₑ ÷ (1 − m)Where
- Cₑ
- Effective cost after recoverability treatment (NZD per unit)Source: Calculated output
- m
- Target retained margin (decimal rate)Source: User decision
- Pₑ
- Required price excluding GST (NZD per unit)Source: Calculated output
Pᵢ = Pₑ × (1 + tₒ) when registered and displaying an inclusive price; otherwise Pᵢ = PₑWhere
- tₒ
- Output GST supply rate (decimal rate)Source: Reviewed official rule · New Zealand GST standard rate
- Pₑ
- Required price excluding GST (NZD per unit)Source: Calculated output
- Pᵢ
- Required displayed price (NZD per unit)Source: Calculated output
T = Pᵢ − PₑWhere
- Pₑ
- Required price excluding GST (NZD per unit)Source: Calculated output
- Pᵢ
- Required displayed price (NZD per unit)Source: Calculated output
- T
- GST component (NZD per unit)Source: Calculated output
G = Pₑ − Cₑ; M = G ÷ PₑWhere
- Cₑ
- Effective cost after recoverability treatment (NZD per unit)Source: Calculated output
- Pₑ
- Required price excluding GST (NZD per unit)Source: Calculated output
- G
- Gross profit per unit (NZD per unit)Source: Calculated output
Money inputs and outputs use NZD. Rates, margins, utilisation and buffers are entered as percentages and converted to decimal values for calculation.
2. Worked example
Input assumptions
The default fixture uses the reviewed GST rate, a confirmed taxable sale, recoverable input tax and a 40% target retained margin.
Calculation and outputs
Example
The default fixture uses the reviewed GST rate, a confirmed taxable sale, recoverable input tax and a 40% target retained margin.
- Entered cost on the selected GST basis
- $60.00
- Output GST supply rate
- 15.00%
- Input GST rate
- 15.00%
- Target retained margin
- 40.0%
- Effective cost
- $60.00
- Required price excluding GST
- $100.00
- Required displayed price
- $115.00
- GST component
- $15.00
- Gross profit per unit
- $40.00
- Last 12 months taxable-activity turnover
- Below review threshold
- Expected next 12 months taxable-activity turnover
- Below review threshold
The engine returns a required displayed price of $115.00 and gross profit of $40.00 per unit.
Interpretation
Use the displayed-price result only after confirming the sale classification, registration position and applicable rate.
3. Validation and boundary checks
- Target margin must be at least 0% and below 100%; money values must be finite and non-negative.
- A tax-inclusive displayed price divided by (1 + the entered GST rate) must round-trip to retained revenue when registration is confirmed.
- Gross profit divided by retained revenue must equal the entered target margin at full engine precision.
- The engine fails closed for unsupported jurisdictions, supply classes and effective periods.
- Each turnover period is compared separately with the source-versioned review threshold.
- Unknown registration status locks the pricing result; registration decision tools continue to show threshold assessment independently.
4. Assumptions and source classification
- The selected jurisdiction, supply class, effective period, registration and recoverability states are correct.
- All money inputs use one consistent per-unit and inclusive/exclusive basis.
- The current displayed price is a comparison only; it does not change the required price.
- The rate and threshold rules are bound to ird-gst-rate-nz@2026-07-16 and ird-gst-registration-threshold-nz@2026-07-16; the user changes the exact policy branch rather than overwriting an official rate.
Official dependencies used by this planner are captured in the Margin101 evidence register and version-acknowledged in this page history. User-entered commercial assumptions remain separate from those official inputs.
5. Limitations
- The planner does not determine GST registration, taxability, place of supply, input-credit eligibility or filing liabilities; it only evaluates the supported confirmed branch.
- It does not model tiered rates, product-specific rates, marketplace collection, cross-border rules, returns, credits or partial exemptions.
- Gross profit excludes fixed costs, overhead allocation, financing, income tax and demand response.
- Use the relevant authority guidance or a qualified adviser for the actual transaction.
This is educational decision support, not tax, accounting, legal or financial advice. Check the treatment of your actual transactions under the rules that apply in New Zealand and seek qualified advice where appropriate.
6. Update and evidence policy
Registered family-level suites test formula invariants and example reconciliation; the release ledger records that coverage without claiming a separate oracle for every line of public copy. Registered official sources block dependent public workflows when their evidence or version acknowledgement is unavailable or invalid. Commercial inputs remain user-supplied because they vary by business and contract.
Change history
- : Initial public release of the planner and methodology after pre-launch calculation, content, source and interaction review.
Related reading
Guides to interpret the decision and its assumptions.
- New Zealand GST Pricing: Final Price and Revenue
Separate retained revenue from New Zealand GST after registration and supply treatment have been independently confirmed.
Read guide