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Re-billing customers ... and GST / VAT

Some businesses incur costs on behalf of their end-customers, ie they incur that they want to recover from their end-customers.

You might also refer to billable expenses as oncharging, onbilling, recharging, reimbursables, or pass on costs.

Xero make it really easy to enter the original expenses as a bill, then allocate these to a customer so that they can easily be added to an invoice for that customer.

Check out Xero's help on billable expenses for all the details.


One of the questions we get asked is whether, if you're registered for GST / VAT, you should be charging any GST /VAT on top of the total cost you've incurred that includes GST / VAT.

The clue is to remember that GST / VAT is not an expense, it's "just" tax you've spending/collecting for the ATO or HMRC. In real terms, you take the underlying expense you've incurred (without the tax component), then raise an invoice to your customer for that underlying expense and then add GST / VAT on top.


You receive a bill from your supplier for $1100 (incl GST / VAT).

You raise an invoice to your customer for $1100 (incl GST / VAT).

The net effect is that you're raising an invoice for exactly the same amount (including GST / VAT) as you paid to your supplier (including GST / VAT) so it's effectively a pass-through, as it should be.