Bookkeeping Perth | Bookkeeping Services Perth | Bookkeepers PerthBookkeeping Perth | Bookkeeping Services Perth | Bookkeepers Perth
Understanding GST in Australia is essential for everyone running a business or earning an income from self-employment in Australia. From knowing when to register to working out what to charge, the rules are broad.
To get you through this, this article answers the most common questions related to GST and shows you how to stay compliant with the ATO (Australian Taxation Office) and avoid mistakes.
GST stands for Goods and Services Tax, the GST tax rate 2025 is expected to remain at 10% to most of the goods and services offered or consumed in Australia. If you register your business for GST, you have to add this tax percentage to the products or services you sell. This final price is known as GST-inclusive pricing.
As a business owner, you also have to pay GST when you buy goods and services from other businesses to run or expand your operations. In this regard, the GST you pay is called input tax credit. When you lodge a Business Activity Statement (BAS), you can subtract the input tax credits from GST collected. In the next step, the difference is paid to the tax office or refunded if more GST was paid than collected.
Claiming GST credits accurately is essential to avoid overpaying and to ensure your business receives any eligible refunds.
The GST turnover threshold Australia currently stands at A$75,000 for most businesses. For non-profit organisations, the threshold is extended to A$150,000. However, if you are in a ride-share business or a taxi driver, then you must register for GST, regardless of your annual turnover.
If your annual income is under the designated income, then you have the option to opt for GST. Once your turnover reaches the threshold, you must register for GST within 21 days of lodgment.
In order to register for GST, you need to have an Australian Business Number (ABN). If you don’t have it, then you can apply for an ABN when you register for GST.
There are multiple ways available for ATO GST registration, which are:
Once you register for GST, you have to include GST in all your product or service pricing. You can visit the Australian Taxation Office GST page for complete information on obligations, updates, and tools.
Some products and services are not subject to GST; these are called GST-free items. Some of the GST exemptions Australia are:
These businesses don’t charge you GST, but they can claim input tax credits on related expenses. You can find a complete GST-free items list on the ATO website.
Moreover, services such as financial transactions may fall under input taxed sales, where GST is not charged, and GST credits can’t be claimed.
Calculating your GST returns is simple. You just need to multiply the selling cost of your products or services by 1.1. Let’s say you sell a product for A$100, then after including GST, it will be A$110.
In order to find GST from a GST-inclusive product, you have to divide the total amount by 11. For example, if a product is listed at A$220, then the GST amount of it will be A$20.
Furthermore, you should show both the total price and the GST amount clearly on your tax invoice. If you’re unsure, use simple online calculators by searching ‘how to calculate GST 10%’.
A BAS is used to report and pay your GST. But how often you lodge it depends on your business size. For instance, if your business’s annual turnover is less than A$75,000, then you should do it annually. If your business turnover is less than A$20 million, then you will do quarterly reports.
However, if your business exceeds A$20 million, then you should lodge a BAS every month. This BAS lodgement frequency helps the ATO monitor tax obligations consistently.
GST and PAY (Pay As You Go) are different tax obligations. Both are reported to BAS, but they have different applications in your business. GST is a tax on sales of goods and services. On the other hand, PAYG is the income paid in advance, either by withholding from the employee’s wages or through instalments for your business income.
If your annual turnover meets the threshold and you don’t register, then you may be required to pay GST on all your past sales, even if you don’t charge it. You may also face interests and penalties from the ATO for this non-compliance.
Besides that, you won’t be able to claim input tax claims. If you’re unsure of your obligations, consider consulting a BAS Agent Perth who can guide you through compliance processes.
Many small businesses make frequent GST errors. Some of the common small business GST compliance errors are:
These mistakes can lead to audit penalties and cash flow problems for your business. Engaging Bookkeeping Services Perth may help small businesses avoid these pitfalls.
Yes, if your freelance or sole trader annual income is A$75,000 or more, then you must register for GST. This includes consultants, designers, tradies, and gig workers. GST for sole traders Australia requires accurate invoicing, BAS submissions, and clear record-keeping.
It’s also important to understand GST on services in Australia, as different service types can have varying GST treatments depending on the industry and client location.
Getting knowledge of when to register, how to calculate it and what to report in GST in Australia can help you avoid costly errors. For both freelancers and growing business operators, GST compliance is necessary to keep your business operation smooth.