Rounding error on GST calculations

Question

I have just created an invoice with this function an noticed that the GST doesn't round, it just drops off the extra digit. For example, $1,902.08 is the ex-gst amount and Solo show GST of $190.20 instead of rounding $190.21 which is what other program do.

My invoice needed to match one that came to me to pass on and it is out by 1 cent, doesn't sound like much but still concerns me.

Can this issue be addressed?

Sigrid-Solo · Answer

We could not agree more, all the info you need should be crystal clear and easy to find! I’m passing this on to our Help Page Queen (trust me, nobody explains things better than she does) to see if we can whip up a new page that covers this.

Thanks again for the feedback and for being such an epic user. We absolutely love seeing legends like you helping us level up Solo! 🙌

Bindyboo4 · Answer

Thank you Ben.

* Explanation was very clear with the table.
* It is now showing with the amount I needed it to show, not sure what happened but I am happy as I didn't need to change anything and couldn't even if Iwanted to as you can't edit after the invoice has been paid in the system (I am happy to send the invoice in question to you privately if helps).
* It definitely would be helpful to have this explanation available somewhere for people new to the app.
* Options are always good but without explanations it would make it more complicated than it needs to be.

Ben-Solo · Answer

Making sense of the cents: Your GST rounding question

Hi @Bindyboo4,

Thanks again for spotting that one-cent GST difference and letting us know! Seriously, great catch. I've spent a good chunk of time digging into this, running the numbers until my eyes crossed, and figuring out what's going on. The answer definitely melted my brain a little – let's just say 'maths genius' isn't on my resume! So, bear with me as I give explaining it a red hot go.

Here's the plan: I'll break down why it happens with an example, share a workaround that should hopefully get you that matching GST figure, and then wrap up with a few questions for you on where we go from here.

Good news: It's not a bug, it's a choice (an ATO-approved one!)

Turns out, that little cent difference isn't an error. It pops up because the ATO actually gives businesses two perfectly valid ways to calculate GST when there's more than one item on an invoice. Yep, two right answers!

You can dive into the official details right here on the ATO website (check the "Rounding of GST" section).

Here’s a side-by-side look at the two methods using our example of 2 items @ $618.24 (ex-GST) each:

FeatureMethod 1: Round at the endMethod 2: Round as you go (Solo's way)When to RoundRound the final total GST amount only.Round the GST for each item individually.Calculation Steps1. Sum all item prices (ex-GST): $1236.48
2. Calculate 10% GST on total: $123.648
3. Round the total GST.1. Calculate 10% GST per item: $61.824
2. Round each item's GST: $61.82
3. Sum the rounded item GSTs.Example Result$123.65$123.64

As the table shows, both methods are valid according to the ATO, but the timing of the rounding step leads to that 1-cent difference. It sounds like your other app uses Method 1 Solo uses Method 2, so what do we do?

Workaround: Matching that other invoice

Need your Solo invoice to match one calculated using Method 1 ("Round at the end")? Try this trick:

* Instead of multiple lines, create one single line item.
* Describe everything in the description (e.g., "2 x Widgets").
* Enter the total ex-GST amount (e.g., $1,236.48) as the price for that single line.

This makes Solo calculate GST on the total, effectively using Method 1 for that invoice.

Just a quick heads-up: I'm not an accountant, and this explanation focuses on how Solo calculates things based on the ATO rules we've discussed. It isn't financial advice. If you're ever unsure about specific GST handling for your business, it's always best to check with the experts – you could ask the ATO directly (they have a community forum too!) or connect with a registered tax or BAS agent, or a financial advisor.

Your thoughts?

Hope this makes the cents make sense! We'd love to know:

* Is this explanation clearer with the table?
* Does the workaround help for your situation?
* Would it be useful to see which method Solo uses somewhere in the app?
* Any interest in having an option to switch methods in the future?

Your feedback helps us tweak Solo until we get this just right for as many people as possible.