Suitable for: Anyone who is registered for GST purposes
Tax Difficulty: Easy
Airtax Experience: First-time users
Time to Read: 2-3 minutes
GST credits based on business use percentage
You can only claim a GST credit to the extent that the purchases relate to your enterprise. Therefore you will need to work out the extent to which each expense was incurred for a business purpose, as opposed to personal use. Generally this is worked out by determining the extent to which an expense was used for a business purpose on a scale of 0-100.
Don’t worry about the tricky calculations of GST credits, our form will handle that. Just input the total amount spent (incl. GST) on each expense item for a period, and then assign a business use percentage next to it. You’ll notice our live GST calculator will change accordingly.
For car expenses, you will need to use a Logbook to more accurately determine this business use as a percentage.
Business use percentage examples:
Example 1 - let’s say you own a car which you use in the ride-sharing economy and also as a personal car. You use the car to travel 3,500 km for your ride-sharing activity out of a total of 5,000 kms in a quarter. On this basis, you use your car 70% for your ride-sharing enterprise and therefore could claim 70% of fuel costs relating to this car for the period.
Generally you will use the same business use percentage for fuel, car insurance, maintenance and cleaning expenses on your Airtax BAS form - as they all relate to the running of your car.
Example 2 - you’re a rideshare driver, and you have a phone internet bill of $99 for 3 months. You use your phone 60% of the time for the purposes of rideshare driving, and 40% for a personal use. Therefore the business use percentage for this phone internet bill will be 60%.
Example 3 - let’s say you purchased a camera for $250 which you use in your photography business, and also to take personal photographs. You use the camera 20% of the time for personal purposes and 80% of the time to take photographs as part of your enterprise. On this basis, you use your camera 80% for your photography business.
Start your BAS with Airtax today:
- Log in or sign up to Airtax
- Complete your BAS using our easy BAS form
- Alternatively, you can book a Business Assist call to speak with one of our specialists who can help you lodge your BAS confidently
