Do I need to register for GST if my turnover is under $75,000?

No, GST registration is optional if your annual GST turnover is below $75,000 ($150,000 for non-profits). However, you can choose to register voluntarily. This can be beneficial if your business purchases include significant GST that you'd like to claim back as input tax credits. Once registered, you must stay registered for at least 12 months.

What counts toward the $75,000 GST turnover threshold?

GST turnover is your total business income (gross revenue, not profit) minus the GST included in your prices, input-taxed sales, sales not connected with Australia, and sales of capital assets. It includes both taxable sales and GST-free sales (like exports or fresh food). The threshold is assessed on a rolling 12-month basis — looking at both the past 12 months and the projected next 12 months.

How soon do I need to register after hitting $75,000?

You must register within 21 days of reaching the GST turnover threshold. If you don't register in time, the ATO can backdate your registration to when you should have registered, and you'll owe GST on all taxable sales from that date — even if you didn't charge GST to your customers. The ATO can backdate registrations up to 4 years.

Should I use cash or accrual accounting for GST?

If your GST turnover is under $10 million, you can choose either method. Cash accounting is simpler for most small businesses — you report GST when money actually changes hands, so you don't owe GST on unpaid invoices. Accrual accounting reports GST when invoices are issued or received, regardless of payment. This is better if you want your GST reporting to match your financial statements.

What is Simpler BAS and do I qualify?

Simpler BAS is the default reporting method for businesses with GST turnover under $10 million. Instead of reporting 7+ GST labels, you only report three: G1 (total sales), 1A (GST on sales), and 1B (GST on purchases). You no longer need to separately report export sales, GST-free sales, or capital purchases on your BAS.

Can I claim GST credits on purchases I made before registering?

Yes, but only if you were entitled to register when you made the purchase. If you backdate your registration, you can claim GST credits on business purchases made during the backdated period. You'll need valid tax invoices for those purchases. You can also claim credits for business stock on hand at the date of registration.

Do I need a tax invoice for every GST credit I claim?

For purchases of $82.50 or less (including GST), you can claim GST credits without a tax invoice — a cash register receipt or bank statement is sufficient. For purchases over $82.50, you must hold a valid tax invoice. For purchases over $1,000, the tax invoice must also include the buyer's identity or ABN.

What happens if I make a mistake on my BAS?

If the net GST error is less than $10,000 and you discover it within 4 years, you can correct it on your next BAS rather than revising the original one. For larger errors or older mistakes, you'll need to request a revision. Voluntarily correcting errors generally means you won't face penalties, though the general interest charge (GIC) may still apply on late payments.

Can I use the GST instalment method instead of calculating GST each quarter?

Yes, if your GST turnover is under $10 million, you can opt for the GST instalment method. The ATO calculates a quarterly instalment amount based on your previous year's GST. You pay this fixed amount each quarter without needing to calculate actual GST. You then do a full annual reconciliation. This reduces quarterly paperwork but means you might over- or under-pay during the year.

What are the penalties for not registering for GST?

If the ATO discovers you should have been registered, they can backdate your registration up to 4 years and require you to pay GST on all taxable sales from that date. You may also face a failure-to-notify penalty (up to 100 units, which is $31,300 in 2025-26) and the general interest charge on any unpaid GST amounts. Voluntary disclosure before an ATO audit typically results in reduced or no penalties.

GST for Small Business

Everything Australian small business owners need to know about GST — when to register, how to charge it, what you can claim back, and how to avoid the mistakes the ATO flags most often.

Updated April 202615 min read

Based on ATO rates & rulingsCurrent for 2025-26

GST for small business — at a glance

GST rate: 10% — flat rate since 1 July 2000
Registration threshold: $75,000 annual GST turnover ($150,000 for non-profits)
Time to register: Within 21 days of exceeding the threshold
BAS lodgement: Usually quarterly (monthly and annual options available)
Simpler BAS: Only 3 GST labels to report if turnover is under $10 million
Tax invoice threshold: Required for GST credit claims on purchases over $82.50 inc GST
Record retention: Keep all GST records for 5 years

Check if you need to register →

Do you need to register for GST?

Not every small business needs to register. Whether you must register depends on your annual GST turnover, your industry, and whether you want to claim fuel tax credits.

Must register

Your GST turnover is $75,000 or more (current or projected)

Assessed on a rolling 12-month basis — both past 12 months and next 12 months

Must register

Your non-profit GST turnover is $150,000 or more

Higher threshold applies to non-profit organisations only

Must register

You provide taxi or ride-sourcing services (Uber, Didi, etc.)

Must register regardless of turnover — even if you earn $1

Must register

You want to claim fuel tax credits

GST registration is a prerequisite for claiming FTC

Optional

Your turnover is under $75,000 but you want to claim input tax credits

Voluntary registration — must stay registered for at least 12 months

The 21-day rule

Once your GST turnover reaches $75,000, you have 21 days to register. The ATO checks both directions: your turnover for the past 12 months and your projected turnover for the next 12 months. If either test is met, you must register. Failing to register on time means the ATO can backdate your GST obligations — and you'll owe GST on sales where you didn't charge it.

ATO Reference

Registering for GST

Official ATO guidance on when you must register, how to register online, and your obligations once registered.

View on ATO website

GST Registration Threshold Checker

Enter your monthly turnover to check whether you need to register for GST — including the forward-looking test.

How to calculate your GST turnover

GST turnover is not the same as profit. It's your total business income (gross revenue) minus certain exclusions. Many small business owners trip up here — if your sales are $80,000 but your profit is only $25,000, you still exceed the threshold.

	Item
	Included: Sales of goods and services (GST-inclusive amount minus the GST)
	Included: Sales that are GST-free (e.g. exports, fresh food, medical services)
	Included: Sales connected with your enterprise in Australia
	Excluded: GST included in your sales prices
	Excluded: Sales to associates that aren't for payment
	Excluded: Input-taxed sales (e.g. residential rent, financial supplies)
	Excluded: Sales of capital assets (e.g. selling a company vehicle)
	Excluded: Sales not connected with Australia

Example: Freelance graphic designer

Sarah is a freelance graphic designer. Over the past 12 months she invoiced:

Design services to Australian clients	$62,000
Logo package sold to a NZ company (export — GST-free)	$8,000
Sold her old iMac (capital asset)	$1,500
GST turnover	$70,000

Her GST turnover is $70,000 — the $62,000 in domestic design services plus the $8,000 export (GST-free sales count toward turnover). The $1,500 iMac sale is excluded because it's a capital asset. Sarah is under the $75,000 threshold, but she should monitor her projected turnover for the next 12 months.

What this means for you

For a sole trader earning $6,500/month in gross revenue

You'll hit the $75,000 threshold in month 12

At $6,500/month, your rolling 12-month turnover reaches $78,000. You should register proactively rather than waiting — the ATO can backdate your obligations if you're late.

Voluntary registration: pros & cons

If your turnover is under $75,000, registration is optional. Whether it makes sense depends on who your customers are and how much GST is embedded in your costs.

Advantages

Claim back GST on all business purchases (input tax credits)
Appear more established to commercial clients who expect tax invoices
Claim GST on startup costs and capital purchases from day one
Avoid backdated GST liability if you suddenly exceed $75K
Required if you want to claim fuel tax credits

Disadvantages

Must charge 10% GST on all taxable sales — could price you out against non-registered competitors
Must lodge BAS returns (quarterly or monthly) even if you owe nothing
Must stay registered for at least 12 months once you opt in
Administrative burden — record keeping, tax invoices, BAS deadlines
If you sell mainly to consumers (not businesses), they can't claim back the GST you charge

When voluntary registration usually makes sense

B2B businesses — your clients are other businesses who can claim back the GST you charge, so it doesn't affect their costs
High startup costs — if you're spending heavily on equipment, fit-out, or inventory before reaching $75K in sales
Approaching the threshold — registering early avoids the risk of backdated liability if you unexpectedly exceed $75K

When it usually doesn't

B2C businesses — your customers are consumers who absorb the 10% GST as a higher price and can't claim it back
Low expenses — if you're a service-based business with minimal purchases, the input tax credits won't be worth the admin burden
Price-sensitive market — adding 10% to your prices could push customers to non-registered competitors

Try it yourself

Enter your quarterly sales and expenses to see how much GST you'd collect and how much you'd claim back — to decide if voluntary registration is worth it.

Try the BAS Estimator

How to register for GST

You need an Australian Business Number (ABN) before you can register for GST. If you don't have one yet, you can apply for an ABN and register for GST at the same time.

Step 1: Get an ABN

Apply through the Australian Business Register (ABR) at abr.gov.au. It's free and usually processed immediately for sole traders with a tax file number.

Step 2: Register for GST

Three options: online via Online services for business (ATO portal), by phoning 13 28 66, or through your registered tax agent or BAS agent.

Step 3: Choose your accounting method

Select cash or accrual accounting and your BAS reporting frequency (quarterly is the default for small businesses). You can change these later.

Step 4: Start charging GST

From your registration date, you must include GST in the price of all taxable sales. You can start claiming input tax credits on business purchases from the same date.

Can I backdate my registration?

Yes — up to 4 years. This is useful if you should have registered earlier or want to claim GST credits on past business purchases. Apply through your tax agent or the ATO. You'll also need to account for GST on all taxable sales during the backdated period.

Charging GST on your sales

Once registered, you must charge 10% GST on all taxable sales. Not every sale is taxable — some are GST-free or input taxed.

What counts as a taxable sale?

A sale is taxable if all four of these conditions are met:

It's made for payment (consideration)
It's made in the course of your business (enterprise)
It's connected with Australia
You are registered (or required to be registered) for GST

If any condition isn't met, or the sale is specifically classified as GST-free or input taxed, no GST applies.

Pricing: GST-inclusive or exclusive?

Under Australian Consumer Law, prices displayed to consumers must be GST-inclusive. For B2B transactions, it's common to quote GST-exclusive prices and show GST as a separate line on the invoice. Either approach is fine as long as your tax invoices clearly show the GST amount.

Tax invoices

You must issue a tax invoice within 28 days if a GST-registered buyer requests one. For sales under $1,000, a simplified tax invoice is sufficient (your ABN, date, description, and GST amount). For sales of $1,000 or more, you also need the buyer's identity or ABN.

Try it yourself

Build a multi-line invoice with automatic GST breakdowns per item.

Try the Invoice Calculator

ATO Reference

When to charge GST (and when not to)

ATO guide to taxable sales, GST-free sales, and input-taxed sales — with examples for common business types.

View on ATO website

What you can (and can't) claim back

As a GST-registered business, you can claim back the GST included in your business purchases — these are called input tax credits. But not every purchase qualifies.

Fully claimable

Office rent (commercial lease — GST applies)
Accounting and legal fees
Business software and subscriptions
Office supplies and stationery
Advertising and marketing costs
Tools, equipment, and machinery
Business-use portion of phone and internet
Work-related travel (flights, accommodation, car hire)

Partially claimable (apportion for business use)

Motor vehicle expenses (business-use percentage only)
Home office costs (if you work from home)
Phone and internet (if also used personally)
Laptop or computer (if also used personally)

Not claimable — no GST included

Wages and superannuation
Bank fees and interest (input taxed — no GST)
Council rates and land tax
Government charges (ASIC fees, some licences)
Residential rent (input taxed — no GST)
Stamp duty
Fresh food purchases (GST-free — no GST to claim)

The $82.50 rule

For purchases of $82.50 or less (inc GST), you can claim GST credits without a tax invoice — a cash register receipt or bank statement is enough. Above $82.50, you need a valid tax invoice or the ATO can disallow the credit during an audit.

Car limit

The GST credit on a car purchase is capped at the car limit. For 2025-26, the car limit is $69,674, meaning the maximum GST credit is $6,334 ($69,674 ÷ 11). This applies regardless of the actual purchase price.

What this means for you

For a tradie spending $30,000/quarter on materials, tools, and fuel (all inc GST)

~$2,727 in GST credits per quarter

That's $10,909 back per year. Without GST registration, this amount is a pure business cost with no recovery.

Input Tax Credit Checker

Check whether you can claim GST credits on a specific purchase — with step-by-step decision-tree guidance.

ATO Reference

Claiming GST credits

ATO guide covering what you can claim, when to claim it, and what records you need.

View on ATO website

Lodging your first BAS

Your Business Activity Statement (BAS) is how you report and pay GST to the ATO. Most small businesses lodge quarterly. Here's what's involved.

Choose your reporting method

Simpler BAS (default for businesses under $10M turnover) requires only 3 GST fields: G1 (total sales), 1A (GST on sales), and 1B (GST on purchases).

Choose cash or accrual accounting

Cash = report GST when money changes hands. Accrual = report GST when you issue or receive an invoice. Businesses under $10M turnover can choose either. Cash is simpler for most small businesses.

Calculate your G1 — total sales

Add up all your sales for the quarter (including GST-free sales). If you're on cash basis, only include sales you've actually been paid for.

Calculate your 1A — GST on sales

The total GST you collected. For most small businesses, this is your taxable sales (inc GST) divided by 11. Don't include GST-free sales in this calculation.

Calculate your 1B — GST on purchases

The total GST included in your business purchases that you can claim back. Again, divide GST-inclusive purchase amounts by 11. Only include creditable purchases.

Net GST = 1A minus 1B

If positive, you owe the ATO. If negative, you're owed a refund. Pay online through myGov or your accounting software by the deadline.

Example: First quarterly BAS

A newly registered electrician had $44,000 in sales (inc GST) and $16,500 in business purchases (inc GST) in their first quarter:

BAS Label	Calculation	Amount
G1	Total sales ($44,000 ÷ 1.1)	$40,000
1A	GST on sales ($44,000 ÷ 11)	$4,000
1B	GST on purchases ($16,500 ÷ 11)	$1,500
Net GST payable to ATO (1A − 1B)		$2,500

The electrician owes $2,500 to the ATO. Without registration, they couldn't have claimed the $1,500 in input tax credits — the effective cost of GST would have been $4,000 absorbed in their pricing.

Try it yourself

Enter your quarterly sales and purchases to estimate your net GST payable or refund.

Try the BAS Estimator

ATO Reference

Lodging your BAS or annual GST return

ATO guide on how to lodge, when it's due, and what to include on your BAS.

View on ATO website

Record-keeping requirements

The ATO requires you to keep GST records for 5 years from the date you prepared or obtained them, or the date of the transaction — whichever is later. Records can be digital (the ATO accepts scanned copies and electronic invoices).

Record Type	Retention	Notes
Tax invoices (issued and received)	5 years	Must meet ATO tax invoice requirements — seller's ABN, date, description, GST amount
BAS lodgement records	5 years	Keep copies of all BAS returns lodged and payment confirmations
Bank statements	5 years	Reconcile against GST records to verify all transactions are accounted for
Cash register tapes / EFTPOS records	5 years	Important for businesses with high-volume cash or card transactions
Motor vehicle log book	5 years	Required for 12 continuous weeks to establish business-use percentage, valid for 5 years
Stocktake records	5 years	Required at end of each income year if you carry trading stock worth over $5,000

Digital records are fine

You don't need to keep paper invoices. The ATO accepts digital copies (scanned PDFs, photos, or electronic invoices) as long as they're legible and complete. Most accounting software (Xero, MYOB, QuickBooks) stores these automatically.

What if I lose a tax invoice?

Ask the supplier for a copy. If you can't get one and the purchase was over $82.50, you technically can't claim the GST credit. However, the ATO allows you to claim without an invoice if you can provide alternative evidence (bank statements, delivery dockets, contracts) — but this is at their discretion.

ATO Reference

Accounting for GST in your business

ATO guidance on accounting methods, record-keeping requirements, and choosing between cash and accrual.

View on ATO website

8 common GST mistakes the ATO flags

The ATO uses sophisticated data matching to identify GST errors. These are the mistakes that trip up small businesses most often — and the ones auditors look for first.

Not registering on time

High risk

You have 21 days to register once your GST turnover hits $75,000. If you don't, the ATO can backdate your registration and you'll owe GST on all sales from that date — even if you didn't charge GST to your customers.

Confusing GST turnover with profit

High risk

GST turnover is your gross income (total sales), not your net profit. A business with $80,000 in sales but only $20,000 profit still exceeds the $75,000 threshold and must register.

Claiming GST credits without valid tax invoices

High risk

For any purchase over $82.50 (inc GST), you need a valid tax invoice to claim the input tax credit. A bank statement or EFTPOS receipt is not enough. The ATO can disallow credits claimed without proper invoices during an audit.

Claiming GST on purchases that don't have GST

Medium risk

Bank fees (input taxed), wages, insurance premiums (some are input taxed), council rates, and interest payments don't include GST. Claiming a credit on these inflates your refund and will be caught.

Mixing personal and business expenses

Medium risk

If you buy a laptop for $2,200 but use it 50% for personal use, you can only claim 50% of the GST ($100, not $200). The ATO uses data matching and benchmarks to spot overclaiming.

Reporting GST-inclusive instead of GST-exclusive at G1

Medium risk

The G1 label on your BAS asks for total sales excluding GST. Entering GST-inclusive figures inflates your reported sales and the GST you owe. If you use cash accounting, G1 should be your cash receipts minus the GST component.

Forgetting GST when selling business assets

Medium risk

If you sell a work vehicle, equipment, or other asset you claimed GST credits on, the sale is a taxable supply. You must include 1/11th of the sale price as GST on your next BAS.

Missing the BAS deadline

Low risk

Late lodgement attracts a failure-to-lodge penalty of $313 per 28-day period (2025-26 rate for small entities), up to a maximum of 5 periods. Late payment incurs the general interest charge (GIC), currently around 11.36% per annum.

Correcting mistakes on your BAS

If you find a GST error, you can usually fix it on your next BAS rather than revising the original — as long as the net error is under $10,000 and you catch it within 4 years. Voluntarily disclosing errors means you generally won't face penalties, though the general interest charge (GIC) may still apply.

GST instalment method

If you find quarterly BAS calculations time-consuming, the GST instalment method may be an option. It's available to businesses with GST turnover under $10 million.

How it works

The ATO calculates a fixed quarterly instalment amount based on your previous year's net GST
You pay this amount each quarter without calculating actual GST
At the end of the year, you do a full annual GST reconciliation to settle any difference
The instalment amount is shown on your pre-filled BAS

When it suits

Your GST position is relatively stable quarter to quarter
You want to reduce quarterly admin and bookkeeping time
You don't have large seasonal fluctuations in sales or purchases
You're comfortable with a potential over- or under-payment being reconciled annually

You can vary your instalment

If your business circumstances change significantly (a large contract, a quiet period), you can vary the instalment amount on your BAS. This prevents major over- or under-payments at the annual reconciliation.

ATO Reference

GST instalments

How to opt in to GST instalments, how the ATO calculates your amount, and when to vary.

View on ATO website

Need to calculate GST?

Our calculator instantly adds or removes 10% GST, generates invoice breakdowns, and estimates your quarterly BAS — all based on current ATO rates for 2025-26.

Use the GST Calculator →

Frequently asked questions

Related guides

How to Calculate GST in Australia

The three GST formulas, worked examples, and a quick reference table for common amounts.

GST Registration Threshold

When you must register, how the $75K threshold works, and voluntary registration pros and cons.

GST-Free Items in Australia

Full list of goods and services exempt from GST, with examples and edge cases.

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