How to Register for GST in Australia (and When You Have To)

When do you have to register for GST?

You must register for GST when your GST turnover reaches $75,000 or more over any rolling 12-month period, or when you expect it to. That is the single number that matters for most businesses. A few specifics worth knowing:

• GST turnover is gross income, not profit. It is your total business income excluding GST, before expenses. It is easy to cross $75,000 sooner than you think.
• It is forward-looking too. You must register if your current turnover has reached $75,000, or if your projected turnover for the next 12 months will.
• You have 21 days. Once you become aware you will exceed the threshold, you have 21 days to register.
• Not-for-profits get $150,000. The threshold is higher for registered not-for-profit organisations.
• Some must register from day one. Taxi, limousine and ride-sourcing drivers (such as Uber and DiDi) must register for GST regardless of turnover.

The rules and current figures are set out on the ATO's registering for GST page. If you are not sure whether you have crossed the line, a quick check of your last 12 months of income will usually answer it, and it is one of the first things a bookkeeper watches for you.

Who needs to register for GST?

Here is the quick version in a table.

How to register for GST, step by step

Registering is free and fairly quick. There are three steps and three ways to do it.

Step 1: Get an ABN. You need an Australian Business Number before you can register for GST. If you do not have one yet, you apply for it first (you can often do both at the same time).

Step 2: Choose how to register. You have three options:

• Online yourself through the ATO's Online services for business, using your myGovID and Digital ID.
• By phone, calling the ATO's business line.
• Through a registered BAS or tax agent, who registers you and usually sets up your GST and BAS correctly at the same time. This is what most of our clients choose, because the setup matters as much as the registration.

Step 3: Choose your settings. When you register you also pick your reporting cycle (monthly, quarterly or annually, most small businesses are quarterly) and your accounting method (cash or accruals). These choices affect your cash flow and your paperwork, so they are worth getting right from the start.

Once it is done, you will have a GST registration date, and from that date you are in the system. The ATO's how GST works guide is a good companion read.

What happens after you register for GST?

Registration changes a few things about how you invoice and report. In plain terms:

• You charge 10% GST on your taxable sales and show it on your invoices.
• You issue tax invoices (an invoice that meets the ATO's requirements) so your customers can claim their own GST credits.
• You claim GST credits on the GST included in your business purchases, which offsets what you owe.
• You lodge a BAS (Business Activity Statement) each period, reporting the GST you collected and the credits you are claiming, and you pay the difference to the ATO or receive a refund.

Not everything you sell necessarily carries GST, some sales are GST-free (for example most basic food and many health services) and getting that coding right is where small businesses most often slip up. For the lodgement side, see our BAS lodgement service, and for the fundamentals of GST itself, our what is GST in Australia guide. The ATO's BAS guidance covers the reporting in detail.

Cash vs accruals, and how often to report

When you register, two settings quietly shape your cash flow and your admin for years, so it is worth understanding them.

Reporting cycle, how often you lodge a BAS. Most small businesses report quarterly. You can report monthly (more paperwork, but tighter control, and required above a certain turnover) or, if your turnover is low and you have chosen to register voluntarily, sometimes annually. Quarterly is the sweet spot for most.

Accounting method, when you account for the GST. On a cash basis, you account for GST in the period you actually receive or pay the money, which suits cash flow because you do not owe GST on an invoice until the customer pays you. On an accruals basis, you account for GST when you issue or receive the invoice, regardless of payment. Smaller businesses often use cash; the right choice depends on how you trade. This is one of the things we set up deliberately rather than by default.

Should you register for GST voluntarily?

If your turnover is under $75,000 you do not have to register, but you can choose to. Whether it is worth it comes down to a simple weigh-up.

It can be worth registering voluntarily when:

• You are in an investment year, a fit-out, new equipment, a vehicle, because you can claim the GST credits on those purchases.
• Your customers are mostly other GST-registered businesses, who do not mind the GST because they claim it back.
• You want to look established to larger clients who expect to deal with GST-registered suppliers.

The trade-off: once registered you must charge GST on your taxable sales (which can make you dearer to non-registered customers, such as the general public) and you must lodge a BAS each period. For a business selling mainly to consumers, that can outweigh the benefit.

It is exactly the kind of decision we model with clients, estimating the credits you would claim against the extra admin, before you commit. If you are weighing it up, book a free call and we will run the numbers with you.

Common GST registration mistakes to avoid

Most GST headaches start at registration or just after. The ones we see most:

• Leaving it too late. Watching only your bank balance, not your rolling 12-month turnover, and blowing past $75,000 without noticing, then being backdated and owing GST you never charged.
• Registering too early for a consumer business. If you sell mainly to the public, charging GST before you have to can just make you 10% dearer for no benefit.
• Picking the wrong accounting method and ending up owing GST on invoices customers have not paid yet.
• Not setting up Xero for GST correctly, so sales and purchases get the wrong tax codes and the first BAS is wrong.
• Forgetting tax invoices. Without a compliant tax invoice, your customers cannot claim their GST credits, and you cannot claim yours on larger purchases.
• Treating GST as your money. The GST you collect is the ATO's; set it aside as it comes in so the BAS never catches you short.

None of these are hard to avoid with the right setup, which is exactly what a bookkeeper handles for you. If you would rather it was just done properly, our BAS and GST service covers registration, setup and ongoing lodgement.

Need to register for GST, or get your GST and BAS set up properly? Book a free call and we will handle the registration and the setup so it is right from day one. See our BAS lodgement service.