GST for Small Business: When to Register and How to Track It

GST registration is one of those decisions every Australian small business owner faces eventually. Some businesses must register, some choose to, and some are better off waiting. Getting it wrong – either registering too late or not registering when you should – can mean penalties from the ATO or missed opportunities to claim back GST on your business purchases. This guide walks you through the registration threshold, the pros and cons of voluntary registration, the registration process itself, and how to track GST properly once you’re registered.

Disclaimer: This article provides general information only and does not constitute tax advice. Consult a registered tax agent for advice specific to your circumstances.

The $75,000 GST Registration Threshold

The ATO requires you to register for GST if your business has a GST turnover of $75,000 or more in the current or previous 12 months, or if you expect it to reach $75,000 in the coming 12 months. For non-profit organisations, the threshold is higher at $150,000.

A few important clarifications on how this works:

• GST turnover is not your profit. It’s your gross business income – all the money your business earns before expenses. If you invoice $80,000 in a year but your costs bring your profit down to $40,000, you’ve still exceeded the threshold.
• It’s a rolling 12-month figure, not a financial year calculation. If you hit $75,000 at any point during a rolling 12-month period, you’re required to register within 21 days.
• Projected turnover counts too. If you land a contract that will push your turnover past $75,000, you need to register from the date you reasonably expect to exceed the threshold – not after you’ve already exceeded it.

Taxi and Rideshare Drivers: The Exception

If you operate a taxi or rideshare service (including Uber, Ola, DiDi, or similar platforms), you must register for GST regardless of your turnover. There is no threshold for taxi and rideshare operators. Even if you only drive a few hours a week and earn $10,000 a year, GST registration is mandatory. For more on deductions specific to rideshare, see our guide to tax deductions for rideshare drivers.

Voluntary Registration: Should You Register Early?

If your turnover is under $75,000, you can still choose to register for GST voluntarily. This is a genuine strategic decision, not just a compliance checkbox, and it’s worth thinking through carefully.

Advantages of Voluntary Registration

• Claim GST credits on business purchases. This is the biggest benefit. If you buy a $2,200 laptop (including GST), you can claim back $200 in GST credits. Over a year, these credits across all your business expenses can add up to a meaningful amount – especially if you’re in a startup phase with significant upfront costs for equipment, software, and setup.
• Appear more professional. Some clients, particularly larger businesses, prefer working with GST-registered suppliers. Issuing tax invoices can signal that your business is established and legitimate.
• Smooth the transition. If you’re approaching the $75,000 threshold, registering early means your systems and processes are already in place when you cross it. No scrambling to figure out GST when you’re forced to.

Disadvantages of Voluntary Registration

• Your prices effectively increase by 10% – or your margins shrink by 10%. If you sell to consumers (B2C), you’ll need to add 10% GST to your prices. Consumers can’t claim GST back, so they feel the full impact. You either pass the cost on (which may make you less competitive) or absorb it (which cuts your profit on every sale).
• BAS obligations begin immediately. Once registered, you must lodge Business Activity Statements – usually quarterly, though some businesses lodge monthly. This adds an administrative burden, even if the amounts are small.
• You can’t easily de-register. You can cancel your GST registration, but only if your turnover drops below $75,000 and you’ve been registered for at least 12 months. It’s not something you want to toggle on and off.

The general rule of thumb: If most of your clients are GST-registered businesses (B2B), voluntary registration often makes sense because your clients can claim back the GST anyway. If you sell primarily to consumers (B2C), think carefully before registering early – the price increase may hurt more than the credits help.

How to Register for GST

Registering for GST is straightforward and can be done online in about 10 minutes. Here’s the process:

1. You need an ABN. If you don’t already have an Australian Business Number, you’ll need to apply for one first at abr.gov.au. You can register for GST at the same time as your ABN.
2. Register through the ATO Business Portal or the ABR. Go to the ATO’s GST registration page and follow the prompts. You’ll need your ABN, business details, and estimated turnover.
3. Choose your reporting and accounting method. You’ll select whether to report GST monthly or quarterly (most small businesses choose quarterly) and whether to use cash or accrual accounting. Cash accounting means you report GST when you actually receive or pay money. Accrual accounting means you report when you issue or receive an invoice, regardless of when the money changes hands.
4. Note your GST registration date. You must start charging GST on your sales from this date and can start claiming GST credits on your purchases.

The whole process is digital. You don’t need to visit an office or submit paper forms.

What Changes When You Register for GST

Once you’re GST-registered, several things change in how you run your business day-to-day:

You must charge GST on taxable sales. Every taxable sale must include 10% GST. A $5,000 project becomes $5,500 on the invoice. You issue a tax invoice that includes your ABN, the words “Tax Invoice”, and the GST amount. Note that some goods and services are GST-free (basic food, medical services, exports) or input-taxed (residential rent, financial services).

You must lodge BAS. Business Activity Statements are due quarterly for most small businesses – by the 28th of the month following each quarter. Your BAS reports the GST collected on sales and the GST paid on purchases. For a detailed walkthrough, see our guide to quarterly BAS lodgement.

You can claim GST credits. For every business purchase that includes GST, you can claim the GST portion back on your BAS. You need a valid tax invoice from the supplier – without it, no credit.

How to Track GST Properly

GST tracking is where many small business owners struggle. The maths isn’t complicated – it’s the consistency that’s hard.

Record GST on every transaction. Every time you make a business purchase or sale, record the total amount, the GST component, and whether the item is taxable, GST-free, or input-taxed. For purchases with GST, the formula is simple: GST = Total Price / 11. A $110 purchase includes $10 of GST.

Keep your tax invoices. The ATO requires you to keep tax invoices for all purchases where you claim GST credits. These records must be kept for five years from the date you lodge the relevant return. Digital copies are perfectly acceptable – a clear photo or scan stored securely is just as valid as the paper original.

Use a consistent system. The biggest GST tracking mistake is inconsistency. Whether you use accounting software, a spreadsheet, or a dedicated receipt tracking app, record every transaction as it happens – not at the end of the quarter when you’re reconstructing three months of activity from memory. For a deeper dive, see our GST receipt tracking guide.

Separate GST-free and taxable purchases. Not every business purchase includes GST. Bank fees, wages, insurance premiums, and many government charges are GST-free or input-taxed. Claiming GST credits on items that don’t include GST will create BAS errors that could trigger ATO attention.

Reconcile before you lodge. Before submitting each BAS, reconcile your records against your bank statements. This catches missed transactions, duplicate entries, and categorisation errors.

Make GST Tracking a Habit, Not a Chore

The businesses that handle GST well aren’t the ones with the fanciest accounting software – they’re the ones that record transactions consistently, keep their invoices organised, and don’t leave BAS preparation to the last minute. Whether you’re newly registered or approaching the threshold, building good GST habits now pays dividends for years to come. Download Taxr and make GST tracking effortless from day one.