Goods and Services Tax (GST) is a 10% tax on most goods and services sold in Australia. As a business owner, you become an unpaid tax collector for the government once you hit a certain size.
The Threshold
You must register for GST if:
- Your business has a GST turnover of $75,000 or more per year ($150,000 for non-profits).
- You provide taxi or ride-sourcing services (like Uber) - you must register regardless of turnover.
If you turnover is less than $75k, registration is optional. Why would you register voluntarily? If you have high business expenses, registering allows you to claim back the GST credits on those purchases.
How GST Works
- You charge an extra 10% on your invoices.
- You keep that 10% aside (don't spend it!).
- You calculate the GST included in business purchases you made.
- You pay the difference to the ATO when you lodge your Business Activity Statement (BAS).
Example: You invoice $1100 ($100 GST). You buy a printer for $220 ($20 GST). You owe the ATO $100 - $20 = $80.
Lodging BAS
Most small businesses lodge quarterly. InvoiceBuddy helps you track your GST collected vs GST paid so you're never surprised by your BAS bill. The golden rule: open a separate savings account for GST and transfer that 10% every time you get paid.