Mathematics • Year 8 • Unit 1 • Lesson 8

GST in the Real World

Use GST exactly the way it appears in everyday life: on supermarket dockets, restaurant bills, tradie invoices and online checkouts. Then explain why "tipping on the inc-GST price" is technically tipping on the tax.

Apply · Real-World Maths

1. Word problems

Each problem involves GST in everyday life. Show your working — single answers without working only earn half marks.

1.1 — New laptop. A laptop is advertised at $900 exc-GST.

(a) Find the inc-GST price.
(b) How much of the inc-GST price is GST? 3 marks

Stuck? Inc-GST = exc-GST × 1.10. The GST is the difference, or simply 10% of $900.

1.2 — Café receipt. A café receipt shows a total of $7.70 inc-GST for one large flat white.

(a) Use the 1/11 shortcut to find the GST included in the total.
(b) What was the price of the coffee before GST? 3 marks

Stuck? GST = 7.70 ÷ 11. Then exc-GST = total − GST (or 7.70 ÷ 1.10).

1.3 — Tradie invoice. A plumber sends an invoice for $440 inc-GST for a job.

(a) What is the plumber's labour charge before GST?
(b) What is the GST amount that the plumber will pass on to the ATO?
(c) The next-door neighbour says the plumber actually keeps the full $440. Briefly explain why that's wrong. 3 marks

Stuck on (c)? The plumber keeps the exc-GST amount. The GST portion goes to the Australian Tax Office.

1.4 — Mixed grocery basket. Marcus's supermarket receipt has these items:
Bread $4.50 (GST-free), milk $3.20 (GST-free), chocolate bar $2.75 (inc-GST), shampoo $7.70 (inc-GST), magazine $5.50 (inc-GST).

(a) Calculate the total bill.
(b) Work out the total GST Marcus paid (only on the taxable items).
(c) What percentage of the total bill is GST? (Round to 1 decimal place.) 3 marks

Stuck on (b)? Apply the ÷ 11 trick to EACH taxable item, not to the whole total (because the bread and milk are GST-free).

1.5 — Online shopping markup. An online store lists a pair of headphones at $99 exc-GST. On checkout, the price jumps because GST is added.

(a) What is the price the customer is asked to pay at checkout?
(b) The customer also pays a $5.50 inc-GST shipping fee. Find the final total AND the total GST charged. 3 marks

Stuck on (b)? Total = headphones inc-GST + shipping inc-GST. Total GST = GST on headphones + GST on shipping.

2. Explain your thinking

This question is about communication, not just answers. Use full sentences. 4 marks

2.1 A restaurant lists prices on the menu as "inc-GST". A meal costs $33 inc-GST. A diner pays a 10% tip on the inc-GST price as a thank-you.

In your answer: (i) calculate the exc-GST price and the GST included in the meal, (ii) calculate the dollar amount of the 10% tip (on the inc-GST $33), (iii) calculate what the tip would have been if it had been 10% of the EXC-GST price instead, and (iv) explain in one or two sentences why tipping on the inc-GST price means the diner is technically "tipping on the tax". Use the phrase "the GST is government tax, not the restaurant's pay" somewhere in your answer.

Stuck? Exc-GST = 33 ÷ 1.10. GST = 33 ÷ 11. Tip-on-inc = 0.10 × 33. Tip-on-exc = 0.10 × exc-GST.

How did this worksheet feel?

Got it Partly Lost

What I'll revisit before next class:

Answers — Do not peek before attempting

1.1 — Laptop $900 exc-GST

(a) Inc-GST = 900 × 1.10 = $990.
(b) GST = 0.10 × 900 = $90 (also 990 ÷ 11 = $90).

1.2 — Café $7.70 inc-GST

(a) GST = 7.70 ÷ 11 = $0.70 (70 cents).
(b) Exc-GST = 7.70 − 0.70 = $7 (or 7.70 ÷ 1.10 = $7).

1.3 — Plumber invoice $440 inc-GST

(a) Plumber's labour exc-GST = 440 ÷ 1.10 = $400.
(b) GST = 440 ÷ 11 = $40 — passed to the ATO.
(c) The plumber bills the customer $440 in total, but only keeps $400. The remaining $40 is GST that the plumber collects on behalf of the government and must remit (pay) to the ATO. So the plumber's actual earnings are $400, not $440.

1.4 — Marcus's mixed grocery basket

(a) Total = 4.50 + 3.20 + 2.75 + 7.70 + 5.50 = $23.65.
(b) GST: bread and milk = $0. Chocolate = 2.75 ÷ 11 = $0.25. Shampoo = 7.70 ÷ 11 = $0.70. Magazine = 5.50 ÷ 11 = $0.50. Total GST = 0 + 0 + 0.25 + 0.70 + 0.50 = $1.45.
(c) % of total that is GST = (1.45 / 23.65) × 100 ≈ 6.1%. (Less than 10% because some items were GST-free.)

1.5 — Online $99 exc-GST headphones + $5.50 shipping

(a) Headphones inc-GST = 99 × 1.10 = $108.90.
(b) Final total = 108.90 + 5.50 = $114.40. Total GST = (108.90 ÷ 11) + (5.50 ÷ 11) = $9.90 + $0.50 = $10.40.

2.1 — Explain your thinking (sample response)

(i) Exc-GST = 33 ÷ 1.10 = $30. GST = 33 ÷ 11 = $3.
(ii) 10% tip on the inc-GST price = 0.10 × 33 = $3.30.
(iii) 10% tip on the exc-GST price = 0.10 × 30 = $3.00.
(iv) The difference is $0.30. When the diner tips on the inc-GST price of $33, they are calculating 10% of an amount that already includes $3 of GST — so $0.30 of the tip is effectively "10% of the GST" being added. Since the GST is government tax, not the restaurant's pay, technically the diner is tipping on the tax. It is a small effect on a single meal, but for big bills (e.g. a $330 family dinner) it would add $3 of extra "tip on tax", which arguably should go to staff service, not be calculated against the government tax portion.

Marking: 1 mark each for the correct exc-GST/GST, tip on $33, tip on $30; 1 mark for a clear explanation that uses "the GST is government tax, not the restaurant's pay".