GST Inclusive/Exclusive Transactions

NexWave supports both GST-inclusive and GST-exclusive pricing across invoices, orders, quotations, and journal entries. This feature provides a simple toggle to control how amounts are entered, matching the behaviour of systems like Xero.

Overview

In New Zealand, prices displayed to consumers must include GST (15%) under the Fair Trading Act. Most NZ businesses receive and issue invoices with GST-inclusive amounts. However, some transactions (exports, B2B wholesale) use GST-exclusive pricing.

NexWave lets you choose how you enter amounts on each transaction:

Tax Inclusive: Amounts you enter already include GST. The system calculates the net amount and GST component automatically.
Tax Exclusive: Amounts you enter are before GST. The system adds GST on top.

Setting a Company Default

You can set a default for each company so new transactions automatically use your preferred mode.

Go to Company and open your company record
Scroll to the Tax Defaults section
Set Default Amounts Are to either Tax Inclusive or Tax Exclusive
Save

New invoices, orders, and quotations for this company will use the selected default. You can override it on any individual transaction.

Using the Toggle on Invoices and Orders

The Amounts Are field appears on the following documents, positioned just above the items table:

Sales Invoice
Purchase Invoice
Sales Order
Purchase Order
Quotation

How It Works

When you change the toggle:

Toggle Setting	What Happens
Tax Inclusive	Item rates are treated as GST-inclusive. The system back-calculates the net amount. Grand total equals the sum of your entered amounts.
Tax Exclusive	Item rates are treated as GST-exclusive. GST is added on top. Grand total equals your entered amounts plus GST.

Example

For an item entered at $115.00 with GST 15%:

	Tax Inclusive	Tax Exclusive
Item Rate	$115.00	$115.00
Net Total	$100.00	$115.00
GST (15%)	$15.00	$17.25
Grand Total	$115.00	$132.25

Document Flow

The toggle carries over when creating downstream documents:

Sales Order to Sales Invoice: The SI inherits the SO's toggle setting
Purchase Order to Purchase Invoice: The PI inherits the PO's toggle
Quotation to Sales Order: The SO inherits the Quotation's toggle
Sales Returns (Credit Notes): Inherit from the original Sales Invoice
Purchase Returns (Debit Notes): Inherit from the original Purchase Invoice

This ensures consistent tax treatment throughout the document chain.

GST on Journal Entries

NexWave also supports automatic GST calculation on Journal Entry lines. This is useful for recording expenses, accruals, or adjustments that have GST implications, without manually calculating the tax split.

Setting Up

Create a new Journal Entry
Set the Amounts Are field (in the GST Calculation section) to either Tax Inclusive or Tax Exclusive

Entering Lines with GST

On each Journal Entry Account row, you can set a GST Rate (%) to enable automatic GST calculation.

Inclusive Mode (Recommended for NZ)

This is the recommended mode for NZ businesses, as it matches how Xero handles journal entries.

Set Amounts Are to Tax Inclusive
Enter the full (gross) amount in the Debit or Credit column
Set the GST Rate (e.g., 15)
The GST Amount and Net Amount columns show a preview of the split
Enter a balancing entry on the other side for the same gross amount
Save: The journal balances at the gross level. No GST rows appear yet.
Submit: The system automatically splits each GST-rated line into its net component and creates a separate GST posting row

Example: Recording a $115 expense (inclusive of GST):

Step	Account	Debit	Credit	GST Rate
You enter	Travel Expenses	$115.00		15%
You enter	Bank Account		$115.00
After save	Journal balances at $115 = $115. No GST rows.
After submit	Travel Expenses	$100.00
	GST Account	$15.00
	Bank Account		$115.00

Exclusive Mode

Set Amounts Are to Tax Exclusive
Enter the net amount in the Debit or Credit column
Set the GST Rate
A GST posting row appears immediately in the grid
Enter a balancing entry that includes the GST (net + GST)

Example: Recording a $100 expense (exclusive of GST):

Step	Account	Debit	Credit	GST Rate
You enter	Travel Expenses	$100.00		15%
Auto-created	GST Account	$15.00
You enter	Bank Account		$115.00

How the GST Account is Determined

The system automatically selects the correct GST account based on the type of account on each line:

Account Type	GST Account Used	Reason
Expense	GST Paid (Input Tax)	Purchasing goods/services
Asset	GST Paid (Input Tax)	Capital asset purchases
Income	GST Collected (Output Tax)	Revenue with GST
Liability	GST Paid (Input Tax)	Most common: expense accruals
Equity	No GST	GST on equity entries is not applicable

The GST accounts are discovered from your existing Sales and Purchase Tax Templates.

Amending a Submitted Journal Entry

If you cancel and amend a submitted journal entry that used inclusive mode, the system automatically restores the original gross amounts. The amended journal entry returns to draft state with the full gross amounts, ready for editing and re-submission.

Manual GST Override

If you need to adjust the calculated GST amount (e.g., to match a supplier's rounding), you can edit the GST Amount field on the source row. The system will use your manual amount instead of the calculated value.

Inclusive Tax Templates

NexWave provides both inclusive and exclusive GST templates:

GST 15%: Standard exclusive template (GST added on top)
GST 15% (Inclusive): Inclusive template (GST included in the amount)

These are available for both Sales and Purchase Tax Templates. If you do not see the inclusive variants, run the NZ Tax Setup from your Company settings.

Key Differences: Inclusive vs Exclusive

Aspect	Tax Inclusive	Tax Exclusive
You enter	Gross amount (including GST)	Net amount (before GST)
System calculates	Net amount and GST from your entry	GST to add on top
Grand total	Same as what you entered	Your entry plus GST
Common use	NZ retail, receipts, supplier invoices	B2B wholesale, exports, AU invoicing
JE draft behaviour	Balances at gross, no GST rows	GST rows created immediately
JE submit behaviour	Splits into net + GST	No change (already split)