October 2025 - Page 2 of 2 - True Tally Bookkeeping

What Is GST in Australia? A Complete Guide for Small Businesses

The Goods and Services Tax (GST) is a 10% levy that is included in the price of most consumer products, and businesses must ensure that it is included in their prices. Simply put, the Goods and Services Tax (GST) is a broad-based 10% tax that applies to most goods and services sold or consumed in Australia. The revenue from this tax is shared across Australian states to fund essential public services such as hospitals and public transport. This tax affects both consumers and business owners. If you run a business, it is important to understand the GST as you may need to register for it and adjust your pricing to include the tax. What Is GST? As mentioned earlier, GST is a consumption-based tax that applies to the things we use or consume. This doesn’t just include food and drinks – it covers almost all products and services that can be consumed or deducted. GST is a flat tax, unlike income tax, which follows a progressive system. This means that the GST rate remains fixed at 10%, regardless of your income, what you buy or how much you spend. (Unless the item or service you sell is GST-exempt – we’ll discuss that shortly.) If your business makes $75,000 or more a year, you’ll need to register for and charge GST. You’ll need to add 10% to your normal prices, record the tax collected and pay it to the government when you file your Business Activity Statement (BAS). When purchasing goods or services that already include GST for your business, you can claim a credit for the GST you paid against the GST you paid to the government. If your GST credit is more than you collected, you may be eligible for a GST refund (we’ll explain that shortly). However, not all products or services are subject to the 10% GST rate. The Australian Government exempts some items, including residential rent, certain food items, medical services, some medicines and precious metals. GST-exempt goods and services are taxed at 0%. To find a full list of GST-exempt items, visit the Australian Taxation Office (ATO) website. Understanding The Goods And Services Tax (GST) in Australia The Goods and Services Tax (GST) is a key part of Australia’s tax structure, applying a 10% charge to most goods, services and certain transactions. This coherent tax system was designed to simplify tax collection and replace the old, more complex sales tax. Under the GST model, businesses act as intermediaries for the government, adding GST to the prices of their products and services throughout the supply chain and then paying that amount to the Australian Taxation Office (ATO). GST registration becomes mandatory for businesses with an annual turnover of $75,000 or more, while not-for-profit organisations must register once they reach $150,000. Businesses need a clear understanding of their GST obligations, which include issuing valid tax invoices, filing regular activity statements and maintaining accurate financial records to support GST credits and claims. Read Next: How Far Back Can the ATO Audit You? Can They Be Avoided? How GST Affects Australian Businesses GST affects businesses by imposing a 10% tax on most goods and services, requiring them to regularly manage tax collections and submit Business Activity Statements (BAS). Any Australian business earning $75,000 or more per year is required to register for GST and include it in their prices. This tax structure promotes fair competition and easy compliance with government tax laws. However, it also affects cash flow as businesses have to pay the collected GST to the ATO – usually every quarter. This requires accurate accounting and detailed record management. When Should You Register for GST in Australia? What Is The GST Registration Threshold? Business turnover: $75,000+ per year Not-for-profit organisations: $150,000+ per year Fuel tax credit claims: GST registration required Ride-share/taxi drivers: Must register immediately Important: You must register within 21 days of crossing this threshold. Benefits of Registering For GST To claim fuel tax credits or taxi travel expenses for your business, you must register for GST. If your GST turnover is below the required threshold, registration remains optional. However, it is often smart business practice to register early—especially if you expect your new venture to exceed the $75,000 turnover mark in its first year of operation. How To Register Once your business is established and you have an Australian Business Number (ABN), you can easily register for GST online, over the phone, via a written form or through your BAS or tax agent. Simply visit the ATO’s online business portal at https://bp.ato.gov.au Or contact the ATO directly on 13 28 66 for assistance. Conclusion: Optimising GST Management Effective GST management in Australia depends on understanding how the Goods and Services Tax affects your pricing structure, cash flow and compliance obligations. For entrepreneurs and high-income earners in Toowoomba, integrating this understanding into daily business operations is critical for financial strength and sustainable growth. Firstly, GST plays a key role in pricing strategy. Adopting GST-inclusive pricing allows you to remain competitive without reducing your profit margins. It also provides transparency by showing customers the full price upfront, which builds confidence in your pricing system. At the same time, ensure that all GST credits and charges are recorded correctly in your books to avoid any mismatches with the Australian Taxation Office (ATO). Secondly, GST has a direct impact on cash flow, so planning ahead is essential. Whether you pay GST quarterly or annually, each option affects your available funds differently. Assess whether your GST reporting schedule fits into your cash flow pattern. Using a cash flow forecast helps predict GST liabilities and keeps your finances stable throughout the year. Finally, compliance cannot be ignored. Meeting GST registration and payment deadlines is important to avoid penalties. Create automatic alerts for BAS lodging and perform regular account reconciliations to catch errors early. Keeping accurate records is key to simplifying GST compliance and saving time as tax deadlines approach. Working with skilled accountants or tax professionals like Truetally adds real

Buying a Car Through Your Business Australia (A Complete Guide)

Maximising your business vehicle tax deduction is an effective way for small business owners in Australia to manage their finances. Many owners believe that buying a car for work can reduce their tax bill, but the rules are not always straightforward. There are often misconceptions about how much can be claimed, which makes it important to get the right guidance. The Australian Taxation Office (ATO) updates its rules regularly, so you should work closely with your accountant to stay on track. In this guide, we break down the process in simple terms, providing clear tips on how small business owners can claim tax benefits when buying a car for business use. What Is a Business Car Loan? A business car loan helps you buy a vehicle for your company by borrowing money from a lender. Like other loans, you have to repay a certain amount in regular instalments, usually monthly, over a set period of time (known as the loan term). You can choose from a variety of business vehicle loans, such as a chattel mortgage, finance lease, or hire purchase. In this article, when we talk about business car loans, we mean a chattel mortgage (also called a goods loan), as it is the most common option used by businesses. Types of Motor Vehicle Deductions The ATO allows small business owners to claim tax deductions for motor vehicles used in business. Below is a general list of expenses you can claim as part of motor vehicle expenses: Petrol, fuel and oil Motor vehicle insurance premiums Interest on a car loan or lease Vehicle registration Repairs and servicing costs Depreciation (reduction in value) Lease payments Vehicle Depreciation: What You Need toKnow If you want to get the most out of your car loan tax deduction, you need to know which vehicle expenses you can claim as a business expense. Fuel and oil: You can claim work-related travel expenses, such as fuel and oil. Keep records of the miles you drive for business so you can support your claim and enjoy the savings. Depreciation: You can claim the depreciation of your business car as a tax deduction. This can significantly reduce your taxable income. Make sure you follow the Australian Taxation Office (ATO) rules carefully so that depreciation is calculated correctly. Insurance: Paying for vehicle insurance is more than just protection—it also qualifies as a deductible expense. Having insurance reduces the overall cost of using a business car. Repairs and maintenance: You can claim the cost of keeping your business car in good condition. Expenses like servicing, changing tires, and repairs count as tax deductions. Registration: You can also write off your car registration fees as a business expense. This tax deduction gives you another opportunity to save money for your company. Continue Reading: How to Use a Weekly Tax Table for Your Business (2026 Guide) Personal Vehicles And Tax Deductions Even if you buy a car in your own name for your small business, you can still claim a tax deduction for the miles and expenses you incur when using the vehicle for work. The easiest way to track both personal and business travel is to keep a logbook, which you can purchase from most newsagents. How you claim car expenses will depend on whether you operate as a sole trader, limited company, trust or partnership. Actual Costs Method This option uses receipts for all car expenses related to business travel. At the end of the financial year, you can claim the business portion of that expense. If you use the car for both work and personal travel, keep proper records. In such cases, multiply the total expense by the percentage of business use. Logbook Method When you use a logbook, you must write down details of each trip, including dates, start and end points, total kilometres and the reason for the journey. To find the business percentage, divide the business kilometres by the total kilometres travelled, then multiply by 100. You should also calculate all your car expenses for the financial year and apply your business usage percentage. Cents Per Kilometre This option requires you to multiply your total business kilometres for the year by the ATO rate. For 2022-23, the rate is 78 cents per kilometre. You can claim a maximum of 5,000 business kilometres per year using this method. FAQs Q1. What expenses can I claim for a business car? You can claim the costs of running a business car, including fuel, servicing, insurance, registration and interest on the car loan. You can also claim lease payments and depreciation. However, you can only claim the portion of expenses related to business use. Any personal or private use must be excluded. Q2. How do I calculate the percentage of business use of my car? To find out your percentage of business use, keep a logbook for at least 12 weeks. Record your odometer readings at the beginning and end of each business trip. Then, calculate the total kilometers driven for business as a percentage of your total kilometers during the logbook period. This percentage is used to estimate your claimable car expenses. Q3. What methods can I use to claim my business car expenses? There are two main methods: the logbook method and the cents-per-kilometre method. The logbook method allows you to claim actual car expenses based on a percentage of your business use. The cents-per-kilometre method allows claims up to 5,000 business kilometres per year at a fixed ATO rate. Companies and trusts can only use the actual expenses method. Recommended to Read: GST Exemptions in Australia: Key Benefits, Rules & Tax-Free Goods Guide