What is GST and when do you need to register?

The Goods and Services Tax is a ten percent tax applied to most goods and services sold in Australia. When your business is registered for GST, you collect ten percent on top of your sale price, hold it on behalf of the ATO, and remit it through your BAS. In return, you can claim the GST you have paid on business expenses as an input tax credit.

Whether you are currently registered for GST or wondering whether you need to be, understanding how it works will help you price correctly, manage your cash flow, and stay on the right side of your obligations.

When registration is required

You are required to register for GST if your annual GST turnover essentially your gross income from sales, not your profit is $75,000 or more. For non-profit organisations, the threshold is $150,000. If you drive for a rideshare platform or provide taxi services, you must register regardless of turnover.

If your turnover is below $75,000, registration is optional. However, there are reasons to register voluntarily: it can make your business appear more established, and it allows you to claim input tax credits on business purchases. The trade-off is the administrative obligation of lodging a BAS.

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Crossing the $75,000 threshold means you must register within 21 days, not at the end of the financial year.

How it works in practice

Once registered, you add ten percent GST to your invoices. If you sell a service for $1,000, your invoice shows $1,000 plus $100 GST, for a total of $1,100. The $100 is not your income it belongs to the ATO. On your BAS, you report the GST collected on sales and subtract the GST you paid on purchases. The difference is remitted to the ATO.

Most small businesses lodge their BAS quarterly, though monthly lodgement is available and sometimes required for businesses with higher turnover. Your accountant or bookkeeper can advise on the right cycle for your situation.