We have a subcontractor who uses one of our fuel cards. We are both GST registered. When invoicing them the expense/reimbursement of their fuel purchases do I charge the $2500 that includes GST the total cost of the purchase or do I add GST to the total cost that I paid so $2750?
TIA
Hi @emz3010
It’s going to depend on the agreement you have with the Subbie regarding how the reimbursement will work. Actual expense plus GST or total expense.
If it was actual expense-plus GST your invoice would be Fuel $2,272.73 + GST $227.27 Total $2500.00
If it was total expense the invoice would be Total expense $2500.00 + GST $250.00 Total $2750.00
Contactors and subbies can at times mark up an expense to their client. If they do this, they then apply GST if they are registered. In the second example the contractor is basically marking up the expense by the value of the GST to get a total expense amount then adding GST.
Both ways are correct, but it can come down to the agreement between both parties had prior to the expense being incurred as to how the invoice is going to look.
It’s a popular question on our community page a couple of my favs are Contractor expense reimbursement including GST and GST on materials.
Hi @emz3010
It’s going to depend on the agreement you have with the Subbie regarding how the reimbursement will work. Actual expense plus GST or total expense.
If it was actual expense-plus GST your invoice would be Fuel $2,272.73 + GST $227.27 Total $2500.00
If it was total expense the invoice would be Total expense $2500.00 + GST $250.00 Total $2750.00
Contactors and subbies can at times mark up an expense to their client. If they do this, they then apply GST if they are registered. In the second example the contractor is basically marking up the expense by the value of the GST to get a total expense amount then adding GST.
Both ways are correct, but it can come down to the agreement between both parties had prior to the expense being incurred as to how the invoice is going to look.
It’s a popular question on our community page a couple of my favs are Contractor expense reimbursement including GST and GST on materials.
15 Apr 2026 · 4 min read time
22 Apr 2024 · 6 min read time
15 Apr 2026 · 4 min read time
1,222 views
1 replies