GST for Small Business Australia: Registration, BAS & Compliance Guide

You must register for GST if your business has a GST turnover of $75,000 or more per year ($150,000 for not-for-profit organisations). GST turnover includes your gross business income before expenses.

You must also register if you provide taxi or ride-sharing services (regardless of turnover), or if you want to claim fuel tax credits. Registration is done through the Australian Business Register (ABR) when you apply for your ABN, or you can register later through the ATO's Business Portal. If your turnover is below the threshold, registration is voluntary.

Voluntary registration can be beneficial if your customers are GST-registered businesses (they can claim back the GST you charge), or if you've significant business expenses on which you want to claim GST credits. However, once registered, you must charge GST on all taxable supplies and lodge regular Business Activity Statements.

GST is a 10% tax on most goods and services sold in Australia. When you sell a product or service for $110 (GST-inclusive), $10 of that's GST that you must remit to the ATO.

In plain English: However, you can claim GST credits for the GST included in your business purchases. If you spend $55 (GST-inclusive) on business supplies, you claim back the $5 GST component. You then remit the difference to the ATO — in this example, $10 collected minus $5 in credits equals $5 net GST payable.

Some supplies are GST-free, including most basic food items, medical services, education, and exports. Input-taxed supplies, such as financial services and residential rent, don't include GST and you can't claim credits for related costs. Understanding which of your supplies are taxable, GST-free, or input-taxed is essential for correct BAS reporting.

If you're registered for GST, you must lodge a BAS either monthly or quarterly. Most small businesses lodge quarterly, with due dates approximately 28 days after the end of each quarter: 28 October, 28 February, 28 April, and 28 July.

The BAS reports your total sales, GST collected on sales, GST paid on purchases (credits), and PAYG withholding if you've employees. The ATO offers two reporting methods for GST: the full calculation method (reporting actual GST on all sales and purchases) and the simpler BAS method (reporting total sales and total purchases, with the ATO calculating GST). You can lodge your BAS online through the ATO Business Portal, through your accounting software (Xero, MYOB, QuickBooks), or through a registered BAS agent.

Late lodgement attracts penalties starting at $313 per 28-day period.

The short version: The most common GST mistakes include failing to register when turnover exceeds $75,000, incorrectly claiming GST credits on GST-free or input-taxed purchases, claiming credits without valid tax invoices ($82.50 or more requires a tax invoice), mixing personal and business expenses and claiming GST credits on personal items, and failing to account for the GST on assets sold or disposed of. Another frequent error is applying GST to exports (which are GST-free) or failing to charge GST on services provided to Australian consumers by overseas businesses.

Cash-basis businesses sometimes confuse the timing of GST obligations — on the cash method, you account for GST when payment is received or made, while on the accruals method, it's when the invoice is issued. The ATO has extensive data matching capabilities and regularly audits small businesses for GST compliance.

Use our GST Calculator to quickly convert between GST-inclusive and GST-exclusive amounts, calculate the GST component of any price, and determine your net GST payable based on collections and credits. For record-keeping, you must retain all tax invoices for purchases over $82.50 for at least five years.

Cloud accounting software like Xero or QuickBooks automatically tracks GST on every transaction, calculates your BAS obligation, and can lodge directly with the ATO. If you're just starting out, consider engaging a registered BAS agent for your first few quarters to ensure your processes are set up correctly. The ATO also offers a free Small Business Assist service with tailored guidance.

Good GST record-keeping from the start saves significant time and stress at BAS time and protects you in the event of an audit. Worth double-checking.