Most importers get the freight quote. Many also factor in the duty rate. A smaller number correctly calculate GST. And almost none of them model all eight cost layers that sit between the supplier’s invoice and the goods arriving at their Australian warehouse.
The mental model that produces consistently wrong landed costs: treating “freight + duty” as the total. The actual formula has more terms. Each additional term is small by itself — customs brokerage, terminal handling, biosecurity levy — but together they add 8–18% to the naïve freight-plus-duty estimate on a typical consignment. Get the model wrong and the import becomes less profitable than projected. Get it right on every shipment and the margin improvement compounds.
This guide sets out the complete landed cost formula for importing to Australia, defines each component, and works through two real examples — electronics from China under ChAFTA and health supplements from the USA under AUSFTA.
The Landed Cost Formula
Landed cost for Australian imports = the sum of all costs incurred between the supplier’s door in the origin country and your warehouse door in Australia:
- Customs Value (CIF) — the base for duty and GST calculations
- Import Duty — levied on customs value at the applicable tariff rate
- GST (10%) — applied to customs value plus duty
- Customs Brokerage — fees for lodging your import declaration
- Port Terminal Handling Charges (THC) — charged by the shipping line at destination port
- Wharfage / Stevedoring — port operator charges for container handling
- Biosecurity Import Levy — DAFF levy on commercial imports
- Last-Mile Delivery — port to your warehouse
Origin costs (supplier packaging, collection, export freight to the origin port) are usually included in the CIF value or treated as part of the goods cost — they don’t appear separately in the Australian landed cost calculation, but they’re already embedded in the customs value.
Layer 1: Customs Value — The CIF Calculation
Australia uses the CIF (Cost, Insurance, Freight) method to determine customs value. The customs value is:
Customs Value = Invoice price of goods + International freight cost + Insurance cost
This means freight is included in the base on which duty and GST are calculated. If your goods have an invoice value of AUD 20,000 and you paid AUD 2,000 in international freight and AUD 200 in insurance, your customs value is AUD 22,200 — and duty and GST are calculated on that AUD 22,200, not on the AUD 20,000 invoice.
This is the most commonly misunderstood aspect of Australian customs valuation. Importers who model duty on the invoice value alone underestimate their duty and GST liability by 8–12% on typical freight-to-goods-value ratios.
Layer 2: Import Duty
Import duty is levied on the customs value at the tariff rate applicable to your goods’ HS code. The standard MFN (Most Favoured Nation) rate for common goods is:
| Product Category | Typical MFN Rate | ChAFTA (China) | AUSFTA (USA) | AANZFTA (ASEAN/Vietnam) |
|---|---|---|---|---|
| Electronics (HS 85xx) | 0–5% | 0% | 0% | 0% |
| Clothing and textiles | 10% | 0% | 0% | 0% |
| Furniture | 5% | 0% | 0% | 0% |
| Footwear | 10% | 0% | 0% | 0% |
| Food preparations (HS 2106) | 4–10% | 0% | 0% | 0% |
| Steel and aluminium structures | 5% | 0–5% | 0% | 0% |
| Vehicles (motor cars) | 5% | 0% | 0% | 0% |
FTA preferential rates require a valid Certificate of Origin from an authorised issuing body in the country of export. For China: CCPIT or CIQ. For the USA: self-certification or authorised body. For ASEAN countries: relevant national trade body (e.g., Vietnam National Chamber of Commerce and Industry — VCCI). The CoO must be requested before or at shipment loading — it cannot be backdated after the vessel sails.
If you don’t present a CoO at the time of import declaration, the MFN rate applies by default. On a AUD 100,000 shipment of clothing from China, the difference between ChAFTA 0% and MFN 10% is AUD 10,000 in duty — plus GST on that duty. Certificate of origin management is not a paperwork formality; it is a direct cost lever.
Layer 3: GST (10%)
Australia’s Goods and Services Tax applies to all taxable importations. The GST base for imports is:
GST Base = Customs Value + Import Duty
GST Rate = 10%
If your customs value is AUD 22,200 and import duty is AUD 1,110 (5%), GST is:
10% × (AUD 22,200 + AUD 1,110) = 10% × AUD 23,310 = AUD 2,331
Under ChAFTA with 0% duty on the same AUD 22,200 customs value:
10% × (AUD 22,200 + 0) = AUD 2,220
The FTA rate saves AUD 1,110 in duty and reduces the GST base — saving an additional AUD 111 in GST. Total saving from the CoO: AUD 1,221 on this consignment.
GST paid at import is generally claimable as an input tax credit by GST-registered Australian businesses on their BAS (Business Activity Statement). The cash flow timing of paying GST at border and recovering it on the next BAS period is the relevant operational consideration — not whether GST is a net cost (for GST-registered businesses, it typically isn’t).
Layer 4: Customs Brokerage
A licensed customs broker prepares and lodges your Import Declaration with ABF, calculates and pays duty and GST on your behalf, and arranges release of cargo. This is not optional — goods cannot clear the Australian border without an import declaration, and only licenced brokers can lodge declarations for commercial importations.
Standard brokerage fees:
- Sea freight FCL import entry: AUD 150–400 per declaration
- LCL / air freight import entry: AUD 100–300 per declaration
- Classification advice (if needed): AUD 100–250 per HS code ruling
- Examination attendance (if ABF or DAFF examines the goods): AUD 100–300 additional
These fees are separate from duty and GST — the broker collects those at cost and remits to ABF, recovering the amount from you.
Layer 5: Terminal Handling Charges (THC)
Destination THC is charged by the shipping line for moving the container from the vessel to the port terminal yard. It is not included in ocean freight rates despite being inevitable. Standard destination THC at Australian ports:
- Port Botany (Sydney): AUD 300–450 per 20ft TEU; AUD 450–650 per 40ft FEU
- Port of Melbourne: AUD 280–430 per TEU; AUD 420–620 per FEU
- Port of Brisbane: AUD 270–420 per TEU; AUD 400–600 per FEU
- Fremantle (Perth): AUD 260–400 per TEU; AUD 380–560 per FEU
For LCL shipments, a destination CFS (Container Freight Station) deconsolidation fee applies instead: typically AUD 20–50 per CBM.
Layer 6: Wharfage
Port operators levy wharfage charges on cargo moving through their terminals. In Australia, this is primarily the stevedore/terminal operator charge — separate from shipping line THC. Wharfage is typically levied per tonne of cargo or per TEU, and varies by terminal operator (DP World, Hutchison Ports, Patrick Terminals). For budgeting, AUD 50–150 per TEU equivalent is a reasonable estimate — your broker or freight forwarder will confirm the specific rate for your port and terminal.
Layer 7: Biosecurity Import Levy
The Department of Agriculture, Fisheries and Forestry (DAFF) administers the Biosecurity Import Levy on commercial goods entering Australia above the de minimis threshold. The levy is charged per import declaration entry line and is separate from any inspection fees that may apply if your goods are selected for biosecurity examination.
Current levy rates are set under the Biosecurity (Charges) Act 2014. For most commercial importers, the levy represents a minor per-shipment cost — typically AUD 10–40 per consignment depending on the number of entry lines. It is not optional and not waivable. Australia’s biosecurity import conditions — including ISPM 15 timber packaging compliance — are enforced at the border regardless of this levy; treatment costs for non-compliant packaging are additional and separate.
Layer 8: Last-Mile Delivery
Port to your warehouse is the final cost layer. Costs vary significantly by port and delivery distance:
- Port Botany to Sydney metro warehouse: AUD 350–600 per 20ft container
- Port of Melbourne to Melbourne metro warehouse: AUD 300–550 per 20ft
- Container unpack / devanning (if required): AUD 150–350 depending on volume
- LCL delivery (per CBM, metro): AUD 25–60 per CBM
The De Minimis Threshold: AUD 1,000
Goods with a customs value at or below AUD 1,000 are generally exempt from import duty and the formal import declaration requirement. This applies to individual consignments — splitting a larger order into multiple sub-AUD 1,000 consignments to avoid duty is considered duty avoidance and is not a lawful strategy.
Note that GST applies to low-value imports from overseas sellers under the Low Value Imports framework (in force since July 2018). Under this regime, overseas sellers with AUD 75,000+ in Australian annual sales must register for and collect Australian GST at the point of sale. Goods that clear below AUD 1,000 and have GST collected by the overseas seller may not have additional GST collected at the border — but they are not GST-free. The mechanism shifts, not eliminates, the GST obligation.
Worked Example 1: Electronics from China (FCL, ChAFTA)
A 20ft FCL container of consumer electronics imported from Shenzhen to Sydney, with a ChAFTA Certificate of Origin:
| Cost Component | Amount (AUD) |
|---|---|
| Goods invoice value (FOB) | 80,000 |
| International freight (included in CIF) | 2,800 |
| Insurance | 240 |
| Customs Value (CIF) | 83,040 |
| Import duty (ChAFTA 0%) | 0 |
| GST (10% × AUD 83,040) | 8,304 |
| Customs brokerage | 280 |
| Destination THC (Port Botany) | 380 |
| Wharfage | 90 |
| Biosecurity levy | 20 |
| Last-mile delivery (Sydney metro) | 450 |
| Total Landed Cost (excl. GST input credit) | AUD 92,564 |
| Effective landed cost (after GST ITC recovery) | AUD 84,260 |
Without the ChAFTA CoO (MFN 5% duty on electronics): additional AUD 4,152 in duty and AUD 415 in GST on that duty — AUD 4,567 more per consignment. At 10 consignments per year, that’s AUD 45,670 of avoidable cost.
Worked Example 2: Health Supplements from the USA (Air Freight, AUSFTA)
500 kg of TGA-listed health supplements imported by air from Los Angeles to Melbourne, with an AUSFTA Certificate of Origin:
| Cost Component | Amount (AUD) |
|---|---|
| Goods invoice value (FOB) | 35,000 |
| International air freight | 3,200 |
| Insurance | 180 |
| Customs Value (CIF) | 38,380 |
| Import duty (AUSFTA 0% on food preparations HS 2106) | 0 |
| GST (10% × AUD 38,380) | 3,838 |
| Customs brokerage | 220 |
| Airport handling (air cargo) | 180 |
| Biosecurity levy | 20 |
| Last-mile delivery (Melbourne metro) | 250 |
| Total Landed Cost (excl. GST ITC) | AUD 42,888 |
| Effective landed cost (after GST ITC recovery) | AUD 39,050 |
Be calibrated about how confidently anyone can predict total landed cost on a new import. There are layers that are knowable with high confidence (the tariff classification, the freight rate quoted at booking, the GST calculation), layers that are knowable with moderate confidence (currency conversion on the customs date, terminal handling fees, broker timing), and layers that are genuinely uncertain (whether the consignment gets selected for inspection, whether anti-dumping or trade-remedy duties apply at clearance, whether biosecurity treatment is required). The most useful landed-cost models separate those three layers explicitly rather than collapsing them into a single point estimate. A point estimate creates false confidence. A range across the three confidence layers creates planning room. The importer who quotes their internal team a single landed-cost number is overconfident. The importer who quotes a calibrated range — base case, likely case, stress case — gives the business room to make better commercial decisions before the cargo moves.
Frequently Asked Questions
What is landed cost and how do I calculate it for Australian imports?
Landed cost = Customs Value (CIF) + Import Duty + GST + Customs Brokerage + THC + Wharfage + Biosecurity Levy + Last-Mile Delivery. Customs value uses the CIF method — goods invoice value plus international freight plus insurance. Duty and GST are calculated on this base.
How is GST calculated on imports to Australia?
GST (10%) is applied to customs value plus import duty. For 0% duty goods (FTA or MFN), GST is 10% of customs value alone. For 5% duty goods, GST is 10% of (customs value + 5% duty). GST paid at import is recoverable as an input tax credit for GST-registered businesses.
What is Australia’s de minimis threshold?
AUD 1,000. Goods at or below this customs value are generally exempt from import duty and the formal declaration requirement. GST may still apply via the overseas seller under the Low Value Imports framework — the AUD 1,000 threshold exempts duty, not necessarily GST.
How do FTA certificate of origin requirements affect my landed cost?
A valid CoO from the exporting country’s authorised issuing body unlocks the FTA preferential rate — 0% under ChAFTA, AUSFTA, or AANZFTA for most goods. Without a CoO, the MFN rate applies. The CoO must be requested at or before shipment loading — it cannot be backdated.
What is the biosecurity import levy?
A DAFF levy on commercial imports above the de minimis threshold. Charged per import declaration entry line — currently a minor per-entry cost. It funds biosecurity inspection infrastructure and applies regardless of whether goods are inspected.
Getting Your Landed Cost Model Right
Import duty and GST explained for Australian importers covers the tax calculation mechanics in full. Australia’s biosecurity import conditions affect all imported goods and add treatment costs for non-compliant packaging — both are factors in an accurate landed cost model.
Swift Cargo provides landed cost assessments as part of the freight quoting process — covering all eight cost layers, FTA duty savings where applicable, and customs clearance coordination for your product category.
Contact Swift Cargo for a landed cost assessment for your Australian import →
