GST Rounding Rules: Per Line or on the Invoice Total

What section 9-90 actually says

One taxable supply on an invoice (subsection 1). If the GST includes a fraction of a cent, it is rounded to the nearest cent, rounding 0.5 cents upwards.

Two or more taxable supplies on the same invoice (subsection 2). The total GST is either (a) the GST of each supply worked out without rounding, added together, then rounded to the nearest cent; or (b) the result of a four-step method: work out the GST of each supply; if it has more decimal places than your accounting system allows, round it to that number of places; add the amounts; round the sum to the nearest cent.

Who chooses (subsection 3). The supplier, when the amount is on an invoice it issues. In practice your point-of-sale or invoicing software has already chosen; the method shows when you compare its figures with a calculation done by hand.

The two methods on common baskets

The gap comes from items whose GST falls close to half a cent: each one rounded up adds a fraction of a cent that the single rounding does not. Systems that keep four decimals for the line GST (the method's step 2 with a four-decimal system) land almost exactly on the single-rounding result.

Why it matters, even though it is cents

On one invoice, it does not. Over a quarter of thousands of small sales, a till that rounds every line up can report several dollars more GST than the same sales rounded per invoice. That is not a mistake (the method is lawful) but it should be a choice, and it should be the same in the till and in the books. The usual trouble is a reconciliation that does not balance: the BAS figure from the accounting software differs from the sum of the till reports by a few dollars, and someone spends an afternoon hunting for a missing sale that never existed.

Rounding in a spreadsheet

Spreadsheets round half away from zero with ROUND, which matches the Act for positive amounts. To reproduce method (a) on a column of GST-inclusive prices in A2:A20, sum the unrounded GST and round once: =ROUND(SUM(A2:A20)/11,2). For method (b) with whole cents per line, round each line in a helper column, =ROUND(A2/11,2), then add them. Our GST calculator applies method (a) to every invoice you build and tells you when method (b) would differ.

Choosing a method for your own invoices

If you issue invoices by hand or from a spreadsheet, method (a) is the simpler one to defend: one calculation per invoice, on the total of the taxable lines, rounded once. If your invoices come from software, keep whatever it does and make sure the till, the online shop and the accounting package agree, or at least that you know which one rounds line by line. Write the choice down in your bookkeeping notes: when a reconciliation is a few cents out at the end of the quarter, that note answers the question in a minute instead of an afternoon.

Rounding is not the same as a wrong rate

A rounding difference is at most a cent or so per line, and it does not grow with the price of each item. If your GST is off by a tenth of a line's value, the problem is elsewhere: an inclusive price treated as exclusive, a GST-free item coded as taxable, or 10% taken off a total instead of dividing by 11. The inclusive and exclusive guide covers those cases.