If you’re running a small business, there’s one question that comes up sooner or later: Do I need to register for GST? The answer depends on your turnover, industry, and even your future projections. In this article, we’ll unpack everything you need to know about GST registration in Australia, so you can avoid nasty surprises from the ATO and take control of your cash flow.
Why GST Registration Matters
GST registration isn’t just a formality. It’s the line between staying compliant and risking unexpected ATO bills.
One of my clients, James, an electrician, put it this way: “I thought GST was optional until the ATO hit me with a $9,000 backdated bill. I felt sick.”
That’s why knowing the GST rules is critical. It’s about protecting your business.
When Do You Need to Register?
According to the ATO GST guidelines:
- If your GST turnover is $75,000 or more, you must register.
- Non-profits have a higher threshold of $150,000.
- Taxi and rideshare drivers must register from day one, no matter their turnover.
- If your projected turnover will pass $75,000 in the next 12 months, you must register within 21 days.
👉 Your GST turnover is your gross income before expenses (excluding GST itself).
What doesn’t count towards turnover?
- Sale of business assets (like your old van).
- Input-taxed sales such as residential rent or financial services.
A café owner once asked me, “I sold some old equipment—does that push me over the threshold?” The answer was no, because asset sales don’t count towards GST turnover.
Voluntary GST Registration
You don’t have to wait until you reach $75,000. Many small businesses choose voluntary GST registration.
When Voluntary GST Registration Helps
- You can claim GST credits on expenses.
- It adds professionalism when working with GST-registered businesses.
- It avoids a last-minute scramble if your sales spike.
When Voluntary GST Registration Hurts
- You’ll need to lodge BAS regularly, even if turnover is low.
- If your customers are domestic end consumers, adding GST may make your prices look higher.
Personal anecdote: I had a freelance designer client who voluntarily registered for GST early. She loved claiming credits on her software subscriptions, but later admitted the quarterly BAS paperwork felt like overkill before her business grew.
How GST Impacts Your Business
Once you’re registered, you must ensure:
Invoicing Rules
- Invoices must say “Tax Invoice.”
- They must show your ABN.
- They must include the GST amount for sales.
Cash vs Accrual GST Reporting
- Cash basis: GST is reported when you receive payment.
- Accrual basis: GST is reported when invoices are issued—even if unpaid.
Small businesses with turnover under $10m can choose cash basis, which avoids paying GST before customers pay you.
Cash Flow Example
Imagine a café makes $110,000 in sales in a year (including $10,000 GST). Expenses total $55,000 (including $5,000 GST).
- GST collected = $10,000
- GST credits = $5,000
- Net payable to ATO = $5,000
If you don’t set aside the $5,000 as you go, you’ll feel the crunch at BAS time.
Industry-Specific GST Rules
Not all industries follow the same rules:
- Taxi & rideshare: Must register regardless of turnover.
- Non-profits: Threshold is $150,000.
- Exporters: Overseas sales are GST-free, but you can still claim credits.
- Health & education: Often input-taxed, meaning you don’t charge GST but may lose credits.
Penalties for Late GST Registration
Miss your deadline and the ATO can:
- Backdate GST to when you should have registered.
- Apply penalties and general interest charge (GIC).
- Issue default assessments that often overestimate what you owe.
James, my electrician client, said “I basically worked for free because I couldn’t go back and collect GST from past customers.”
The rule is simple: once you hit the threshold on a monthly basis, you must register within 21 days.
Simplified GST Reporting for Small Business
Good news—there are concessions:
- If turnover is under $10m, you can report on a cash basis.
- Voluntary registrants under $75k can lodge annually.
- Simplified BAS means fewer reporting fields for eligible small businesses.
This reduces admin time but doesn’t remove the need for proper record keeping.
For more help with record keeping, check out our Guide: Record Keeping Guide for Small Business.
From Stress to Confidence
Here’s the truth—GST creates stress. I’ve seen small business owners lose sleep over BAS, penalties, and uncertainty.
But once systems are in place—like adding GST automatically to invoices and putting it aside in a separate bank account—the stress shifts to confidence.
One client said after setting up the right system: “I actually look forward to BAS now—it’s my proof I’m on top of things.”
Conclusion:
So—GST registration in Australia. Here are the key takeaways:
- Register once turnover hits $75,000, or if it’s projected to within 12 months.
- Taxi and rideshare? Compulsory from day one.
- Not all income counts towards GST turnover.
- Voluntary registration has pros and cons—choose carefully.
- Invoices, BAS, and cash flow all change once you’re registered.
- Miss the deadline and the ATO can backdate GST with penalties.
- Small business concessions can make reporting easier.
Handled right, GST doesn’t have to be stressful—it can be just another part of running a professional business.
Next Steps
📅 Want help setting up GST properly and avoiding penalties? Book a meeting here: Book a Meeting
📘 Download our free guides and templates to keep your business compliant: Free Business Guides
Take control of GST now—and get back to focusing on growing your business.
