Tax / GST / VAT all refer to the indirect tax you’ve configured in RMS (for example GST in Australia/New Zealand or VAT in some regions), and the calculations below apply in the same way for a tax‑inclusive setup regardless of the label used.

Overview

RMS supports two tax calculation modes for tax‑inclusive pricing:

• Full GST – the standard tax rate that applies to most taxable transactions.
• Concessional GST – a reduced effective tax rate that typically applies to eligible long‑term accommodation stays, based on your local tax rules (for example, stays longer than a certain number of nights).

In RMS:

• Full GST is controlled by the GST divisor set in Setup > Accounting > Accounting Options > GST.
• Concessional GST is controlled by the Concessional GST reduction percentage, criteria, and Discount GST values set in the same screen.

Full GST (Tax Inclusive)

RMS will calculate Full GST on any transaction, excluding Sundry Charges set up as GST Free, using the divisor entered in: Setup > Accounting > Accounting Options > GST

In this example, Full GST is 10%, which means the tax‑inclusive charge is divisible by 11:

• GST Component = Total Charge ÷ 11
• Net Charge (before tax) = Total Charge − GST component

Example (Full GST 10%)

• Total Charge = $100
• GST portion = $100 ÷ 11 = $9.09 Tax/GST
• Net Charge = $100 − $9.09 = $90.91

When you post a taxable charge to the account, RMS automatically performs this split between Net Charge and GST.

Concessional GST (Tax Inclusive)

What is Concessional GST in RMS?

Concessional GST in RMS represents a reduced tax amount that applies to eligible long‑stay accommodation based on the rules in your region. Commonly:

• A full GST rate applies up to a threshold (for example, the first 27 nights).
• A reduced effective GST (Concessional GST) applies to the portion above the threshold, or from Day 1 if you select “Reduced GST from Day 1” on the reservation.

RMS uses the Concessional GST configuration you set in: Setup > Accounting > Accounting Options > GST

RMS will calculate Concessional GST on any transaction (excluding GST Free Sundry Charges) when:

• The accommodation portion is above the configured threshold (e.g. after 27 nights), or
• The reservation has “Reduced GST from Day 1” selected and meets your concessional criteria.
   

How RMS calculates Concessional GST (Conceptual Steps)

Using the same example where:

• Full GST = 10%
• Concessional GST (target tax on eligible nights) = 5.5%
• Concessional GST reduction = 5.21327% (used internally to get from the full‑tax total to the concessional‑tax total)

RMS follows this logic for the tax‑inclusive calculation on the concessional portion:

1. Start from the Full GST calculation
   Treat the charge as if it were fully taxed at 10% GST to find the Net Charge.
2. Work out the discount needed to move from Full GST to Concessional GST
   RMS uses the difference between the full tax rate (10%) and the concessional tax rate (5.5%) to calculate a discount percentage on the tax‑inclusive total.
3. Apply that discount to get the concessional tax‑inclusive total
   This gives a new Total Charge that corresponds to the lower 5.5% tax rate.
4. Apply the Concessional GST reduction percentage
   RMS uses the Concessional GST reduction (5.21327%) to calculate the Discounted Tax/GST amount on that reduced total.

The result is a lower tax amount and a reduced tax‑inclusive total for the concessional portion of the stay.

Worked Example – Concessional GST

Using a $100 Total Charge and the example configuration:

• Full GST: 10%
• Concessional GST: 5.5%
• Concessional GST reduction: 5.21327%

Step 1 – Calculate Full GST and Net Charge

• Total Charge (full GST) = $100
• Tax/GST at 10% (Full GST) = $100 ÷ 11 = $9.09
• Net Charge = $100 − $9.09 = $90.91

Step 2 – Calculate the effective discount rate on the tax‑inclusive price

RMS compares the Full GST rate (10%) with the Concessional GST rate (5.5%) and works out how much the original tax‑inclusive total needs to be reduced.

In this example, RMS calculates that it needs to reduce the original total by 4.0909% to move from 10% GST down to an effective 5.5% GST.

So for a $100 charge:

• Discount on total = 4.0909% of $100 ≈ $4.09

Step 3 – Apply the discount to get the concessional Total Charge

RMS applies that discount to the original total:

• Original Total Charge = $100.00
• Less discount (4.0909%) ≈ $4.09
• Concessional Total Charge = $100.00 − $4.09 = $95.91

So the concessional tax‑inclusive total is $95.91 instead of $100.

Step 4 – Calculate the Discounted Tax/GST

RMS then uses the configured Concessional Tax/GST reduction (5.21327%) to work out the actual tax amount on the concessional total:

• Discounted Tax/GST = 5.21327% of $95.91 ≈ $5.00

In this concessional example:

• Tax/GST = $5.00
• Concessional Total Charge = $95.91
• Net Charge stays about $90.91 (because $95.91 − $5.00 ≈ $90.91)

Example Reservation Scenarios

These examples show how Full GST and Concessional GST apply to real reservations in RMS, using the same rates and calculations described above.

Scenario 1 – Short Stay (Full GST Only)

• Stay length: 5 nights
• Rate: $100 per night (tax‑inclusive)
• Total accommodation charge: $500

With Full GST at 10%:

• GST portion per night = $100 ÷ 11 = $9.09
• Net per night = $100 − $9.09 = $90.91

Across the whole stay:

• Total GST = $9.09 × 5 = $45.45
• Total Net Charge = $90.91 × 5 = $454.55
• Total Charge = $454.55 + $45.45 = $500.00

How this appears in RMS:

• The reservation account will show accommodation charges of $100 per night.
• The Tax/GST component for those charges is calculated at the Full GST rate only.

Scenario 2 – Long Stay (Concessional GST Applies)

• Stay length: 30 nights
• Rate: $100 per night (tax‑inclusive)
• Concessional rules:
  • Full GST (10%) applies to the first 27 nights
  • Concessional GST (effective 5.5%) applies to nights 28–30, based on your Concessional GST setup.

Conceptually in RMS:

1. Nights 1–27 
   • Charged at $100 per night, taxed at Full GST (10%).
   • RMS uses the Full GST divisor (11) to split each night into Net + GST.
2. Nights 28–30 
   • Charged at $100 per night, but treated as Concessional GST nights.
   • RMS:
     • Starts from the full GST calculation (Net ≈ $90.91).
     • Applies the 4.0909% discount to reach a concessional total of $95.91 per night.
     • Uses the Concessional GST reduction (5.21327%) to calculate $5.00 tax on each concessional night.

For each concessional night:

• Concessional Total Charge ≈ $95.91
• Discounted Tax/GST ≈ $5.00
• Net Charge ≈ $90.91

How this appears in RMS:

• The reservation account shows all 30 nights with their charges.
• The tax component on the concessional nights is lower (about $5.00 vs $9.09), reflecting your Concessional GST configuration.
• Reports that show Tax/GST will reflect the reduced tax on the concessional portion of the stay.

Interactive Tax Calculator

Download the Interactive Tax Calculator (Excel) attached below to test different Total Charges, Full GST rates, and Concessional GST settings.

• Enter your own tax rates, thresholds, and amounts, and
• See how Full GST and Concessional GST are calculated in a tax-inclusive setup.