GST basics for small business

Goods and services tax (GST) is a 10% tax on most sales of goods and services in Australia. Whether you have to deal with it comes down to your GST turnover. This guide covers the registration threshold, the 21-day rule, and how GST flows through to your BAS.

When you must register for GST

You must register for GST once your GST turnover reaches $75,000, or $150,000 for a non-profit. Below that, registration is optional.

The trigger for GST is your GST turnover, which is your gross business income minus GST. You must register once that turnover reaches $75,000 or more, or $150,000 for a non-profit organisation.[^1] A new business should register if it expects to reach the threshold in its first year. Taxi, limousine, and ride-sourcing services must register regardless of turnover.[^1]

Below the threshold, registration is optional. If you choose to register voluntarily, you generally stay registered for at least 12 months.[^1]

  • GST turnover of $75,000 or more: registration required.
  • Non-profit organisation at $150,000 or more: registration required.
  • Taxi, limousine, or ride-sourcing: register regardless of turnover.
  • Below the threshold: registration is optional, with a 12-month minimum if you opt in.

The 21-day rule

Once you become aware your turnover will exceed the threshold, you have 21 days to register. Monitoring turnover each month is your responsibility.

Registration timing is on you, not the ATO. You must register within 21 days of becoming aware that your GST turnover will go over the threshold.[^1] The ATO measures turnover two ways: current GST turnover is your turnover for the current month and the previous 11 months, and projected GST turnover is the current month plus the next 11. You reach the threshold if either figure is $75,000 or more.[^2]

Because it is projected as well as current turnover, a single large month or a clear growth trend can put you over before the year is out. Checking turnover monthly is the safe habit.

How GST works once you are registered

You add 10% GST to most sales, claim back GST on most business purchases, and report the difference to the ATO on your BAS.

Once registered, you include GST in the price of most goods and services you sell, you can claim GST credits for the GST included in most business purchases, and you lodge activity statements reporting your sales, the GST on those sales, and your GST credits.[^3] The ATO collects the difference, or refunds you when your credits exceed the GST you collected.

Not every sale carries GST. Some items are GST-free, such as most basic food and many health and education services, and some are input-taxed. Getting the treatment right on each transaction is where coding accuracy matters, because an error flows straight through to your BAS.

Keeping GST coding clean

GST errors hide in the detail and surface at BAS time. Consistent coding and a clear evidence trail keep the figures defensible.

The risk with GST is rarely the headline rate. It is the steady accumulation of small coding decisions: which purchases carry GST, which sales are GST-free, and whether the receipt actually supports the claim. Keeping coding consistent and evidence attached as you go is what makes a BAS hold up if it is ever reviewed.

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