Browse Forums Building A New House 1 Jul 19, 2022 12:38 pm Hi I don't understand GST too much so apologies if this is straight forward. Should a builder apply his builder margin before or after GST (this does not relate to provisional or prime cost but a fixed price contract). I was hoping it was before GST but been informed builder margin is applied after GST is added Re: Builder margin Inc or Exc GST 3Jul 19, 2022 2:47 pm alexp79 Does it really matter? Let's say your apply 20% margin on top of $100, so with GST you get $120*1.1=$132. If he applies margin after GST, you get $110*1.2=$132. Same that's only true if they aren't double dipping on GST they could say that their margin is calculated on the GST inclusive price, but itself isn't including the GST. so it will be: margin = original price inc GST ($110) * 0.2 + (original price inc GST ($110) * 0.2)/10 = $24.20inc or it could be just: margin = original price ex GST ($100) * 0.2 + (original price ex GST ($100) * 0.2)/10 = $22.00inc unless there is some legislation that regulates how the margin is supposed to be calculated. cause technically it's just a fee they take for managing it all, and it can be whatever they decide it to be. just because the original item includes the GST doesn't necessarily mean that 20% fee does. EDIT: updated some incorrect numbers Re: Builder margin Inc or Exc GST 4Jul 20, 2022 9:01 am strannik alexp79 Does it really matter? Let's say your apply 20% margin on top of $100, so with GST you get $120*1.1=$132. If he applies margin after GST, you get $110*1.2=$132. Same that's only true if they aren't double dipping on GST they could say that their margin is calculated on the GST inclusive price, but itself isn't including the GST. so it will be: margin = original price inc GST ($110) * 0.2 + (original price inc GST ($110) * 0.2)/10 = $24.20inc or it could be just: margin = original price ex GST ($100) * 0.2 + (original price ex GST ($100) * 0.2)/10 = $22.00inc unless there is some legislation that regulates how the margin is supposed to be calculated. cause technically it's just a fee they take for managing it all, and it can be whatever they decide it to be. just because the original item includes the GST doesn't necessarily mean that 20% fee does. EDIT: updated some incorrect numbers If they are double dipping on the GST that int fair. With our variations we use the method outlined by Alex. Architectural Homes & Duplexes - specialising in custom designing homes to your budget Get a Free Onsite Consultation Today or send a PM for information, questions or advice. Re: Builder margin Inc or Exc GST 6Jul 20, 2022 12:22 pm eguan88 What does builder margin do in a contract? it is a way to protect them from rising building costs? it gets added to all the variations on top of the cost of the additional work/items it's essentially a 'management fee'/builder's profit Hi Mofflepop, I would recommend finding a building designer to prepare plans, they should design to your specified budget. The benefit is you can tender the project out… 9 20457 The HIA contract, in the term & conditions section states that "Commencment" is deemed when the drainage is started or the piers are dug or the slab is formed up (incase… 2 6191 |