If you’re asking yourself “Do I need to register for GST?” you’re not alone. Many small business owners are caught out by the $75,000 threshold and ATO rules.
Why GST Matters More Than You Think
GST isn’t just another tax. It’s one of the most common questions small business owners ask, and getting it wrong can mean backdated tax bills, penalties, and sleepless nights.
One new client told me: “I didn’t think GST applied to me, because I was just a sole trader making a modest profit.” What he didn’t realise was that GST is based on turnover, not profit. The ATO backdated his GST registration, and suddenly he was on the hook for thousands he never collected from clients.
So let’s clear this up once and for all.
What is GST and How Does It Work?
GST—Goods and Services Tax—is a 10% tax added to most goods and services sold in Australia. As a business, you collect GST from customers and pass it on to the ATO through your BAS (Business Activity Statement).
But not every business needs to register straight away. So the big question remains: Do I need to register for GST?
GST and Business Structure – When Registration is Required
Your business structure doesn’t change the threshold rules, but it can impact how you manage GST reporting.
- Sole traders: Must register once turnover is $75,000+.
- Companies: Same threshold, but more compliance requirements.
- Non-profits: Threshold increases to $150,000.
- Taxi and rideshare drivers: Must register from the first dollar earned—no threshold.
👉 For details, see the ATO’s guide on registering for GST.
GST Threshold – Turnover vs Profit
This is the #1 misunderstanding I see. The threshold is based on gross income (turnover), not profit. If you invoice $80,000 but only make $25,000 profit, you still need to register.
Another new client told me: “I thought I was under the limit because my profit was small. Finding out it was turnover-based was a shock.”
Industry-Specific Rules
Some industries face specific GST obligations:
- Rideshare/taxi services: Must be registered immediately.
- Exporters: GST-free sales, but may still need to register to claim input tax credits.
- Medical and education providers: Often GST-free, but still need to check thresholds.
Learn more at business.gov.au’s GST page.
Business Structure and GST Reporting
Once you’re registered, you’ll need to report GST through your BAS.
- Cash basis: Pay GST only when you’ve received payment from clients.
- Accrual basis: Pay GST based on invoices issued, even if unpaid.
For most small businesses, cash basis makes life easier and keeps cash flow steady.
When I started advising startups, many chose accrual reporting by mistake. They ended up paying GST on invoices clients hadn’t even paid yet. Switching to cash basis gave them breathing room.
GST-Free and Input-Taxed Sales
Not all sales include GST:
- GST-free: Basic food, health, childcare, some education.
- Input taxed: Financial services, residential rent.
This is important because even if you’re registered, not everything you sell needs GST added.
Why Register Early?
Some businesses choose to register before hitting the $75k threshold. Why?
- Claim input tax credits: You can claim back GST on purchases like laptops, equipment, or fuel.
- Look more professional: Larger clients expect tax invoices with GST.
- Avoid surprises: Easier to manage than scrambling once you cross the line.
But here’s the caution: voluntary registration means more admin. You’ll need to lodge BAS regularly, even if you don’t hit $75k turnover yet.
What Happens if You Don’t Register?
Failing to register on time can have big consequences. The ATO can backdate your registration, meaning you’ll owe GST on past sales—even if you never charged your customers for it.
Imagine turning over $100,000 and then being told you owe $9,090 in GST out of your own pocket. That’s enough to break cash flow for many small businesses.
Business Structure, Pricing, and Customers
A common fear is: “If I add GST, won’t my customers leave?”
Reality check:
- Business clients usually claim GST back, so it doesn’t affect them.
- Consumers pay 10% more, but GST registration signals professionalism and credibility.
Crossing the Threshold Mid-Year
If you cross $75,000 turnover mid-year, you have 21 days to register. Don’t wait until tax time—the obligation kicks in immediately. Update your invoices to include GST as soon as you’re registered.
How to Apply This to Your Business
Grab a notebook and jot down:
- Your projected turnover for the next 12 months.
- Your business structure (sole trader, company, partnership, etc.).
- Whether you’re in an industry with special rules.
- Whether cash or accrual GST reporting suits you best.
This simple checklist makes it clear whether you need to register now—or plan to soon.
Wrap Up
So, do I need to register for GST?
- Yes, if turnover is $75k+ for any business structure.
- Yes, from day one for rideshare/taxi operators.
- Yes, if you want to claim credits or look more professional.
We’ve covered turnover vs profit, industry exceptions, cash vs accrual, and the risks of ignoring registration. The decision comes down to your numbers, your industry, and your growth plans.
Next Steps
Don’t leave this to chance. A proactive approach saves money, stress, and protects your business.
📅 Book a meeting today to get tailored advice: Book a Meeting Here
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And while you’re here, check out our article on What meals are Tax Deductible.
