Do I Need to Register for GST? The $75,000 Rule Explained
Quick answer
You must register for GST when your business’s annual GST turnover reaches, or is expected to reach, $75,000. You have 21 days to register once you know you’ll pass the threshold. Taxi and rideshare drivers must register from their first fare, regardless of income. Not-for-profits have a $150,000 threshold.
GST is one of the first tax questions every new business runs into. Here’s how the rule works in practice, and what changes once you’re registered.
How the $75,000 turnover test works
Your GST turnover is your total business income, before expenses, not your profit. The ATO looks at it two ways, and you must register if either is $75,000 or more:
- Current turnover: your income for the current month plus the previous 11 months.
- Projected turnover: your expected income for the current month plus the next 11 months.
So if you land a big contract that will push you over $75,000 in the next year, you need to register even if you haven’t earned it yet.
Who must register regardless of turnover
- Taxi and rideshare drivers, including Uber, DiDi and Ola drivers, from their first fare
- Businesses that want to claim fuel tax credits
- Not-for-profit organisations once their turnover reaches $150,000
Food delivery riders follow the normal $75,000 rule.
Should you register voluntarily?
You can register below the threshold. It can make sense if most of your customers are GST-registered businesses (they can claim back the GST you charge), or if you buy a lot of equipment and want to claim GST credits. It may not suit you if you sell mainly to consumers, because your prices effectively rise by 10%, and you’ll need to lodge a BAS.
What changes once you’re registered
- Add 10% GST to the price of most of your sales
- Issue tax invoices: required for sales of $82.50 or more (including GST)
- Claim GST credits on business purchases
- Lodge a Business Activity Statement (BAS), usually quarterly
- Keep GST money separate, as it isn’t yours to spend
How to calculate GST
| What you want | How to do it | Example |
|---|---|---|
| Add GST to a price | Multiply by 1.1 | $200 × 1.1 = $220 |
| Find the GST in a GST-inclusive price | Divide by 11 | $220 ÷ 11 = $20 |
| Find the price before GST | Divide by 1.1 | $220 ÷ 1.1 = $200 |
Quarterly BAS due dates
| Quarter | Period | Due date |
|---|---|---|
| Q1 | July – September | 28 October |
| Q2 | October – December | 28 February |
| Q3 | January – March | 28 April |
| Q4 | April – June | 28 July |
If you lodge through a registered tax or BAS agent, you may get extra time. When a due date falls on a weekend or public holiday, you can lodge on the next business day.
Tip: Each time a customer pays you, move one-eleventh of the payment into a separate savings account. When your BAS is due, the GST is already sitting there.
How to register
You can register for GST when you apply for your ABN, or later through the ATO’s Online services for business, your tax agent or BAS agent, or by phone. If you register late, the ATO can backdate your registration and you may owe GST on past sales, so register as soon as you know you’ll pass the threshold.
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We’ll keep your books up to date and lodge your BAS on time, every quarter. Fixed price from $299/mo.
Frequently asked questions
Is the $75,000 threshold based on profit or income?
Income. GST turnover is your total business income before expenses, not your profit.
What happens if I don’t register in time?
The ATO can backdate your registration to when you should have registered. You may have to pay the GST you should have charged, plus penalties and interest.
Can I cancel my GST registration?
If your turnover drops below $75,000, you can usually cancel, but you must have been registered for at least 12 months if you registered voluntarily. If you close your business, cancel within 21 days.
Do I charge GST to overseas customers?
Many sales of services to overseas customers are GST-free, but the rules are detailed. Check with the ATO or a tax agent before assuming.
This article is general information only, not tax, legal or financial advice. Check ato.gov.au or speak with a registered tax agent about your situation.
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