What the GST registration threshold actually is
The GST registration threshold Australia uses is set by the Australian Taxation Office (ATO) and sits at $75,000 in gross business income (called GST turnover) over any rolling 12-month period. Goods and Services Tax (GST) is a 10 percent tax added to most sales of goods and services, and once you cross the threshold you must register, start charging it on your invoices, and lodge a Business Activity Statement (BAS) each period.
The number that matters is not your profit, your taxable income, or what hits your bank account after expenses. It is gross sales — what you invoice customers before you pay yourself, before software costs, before fuel and rent. A consultant invoicing $7,000 a month is on track to cross $75,000 well inside a year, even if their take-home is half of that.
The threshold applies to all business structures equally. Sole traders, partnerships, companies, and trusts all use the same $75,000 figure. What changes is who lodges the BAS and whose Australian Business Number (ABN) is on the invoice — not the line in the sand.
GST turnover, not profit
GST turnover is gross income from business activities over a rolling 12-month period. It excludes input-taxed sales (like residential rent) and GST itself, but it is calculated before deducting any expenses.
Thresholds by business type
The $75,000 figure is the headline number, but the ATO sets different thresholds for different kinds of organisations. Knowing which one applies to you matters, because registering late triggers backdated GST liability and potential penalties.
Three thresholds exist in practice. Most businesses sit in the first bucket. Non-profits get a higher ceiling because the policy intent is to keep volunteer-run organisations out of the GST system unless they genuinely operate at scale. Taxi and ride-share drivers sit in a special category with no threshold at all — the ATO requires registration from the first dollar of fares.
GST registration thresholds in Australia, set by the ATO
| Type of entity | GST turnover threshold | When you must register |
|---|---|---|
| Standard business (sole trader, company, trust, partnership) | $75,000 | Within 21 days of reaching or expecting to reach the threshold |
| Non-profit organisation | $150,000 | Within 21 days of reaching or expecting to reach the threshold |
| Taxi, ride-share, and limousine driver | $0 | Before your first fare, regardless of turnover |
When you actually have to register
The ATO uses two tests to decide whether you have crossed the line. The first is the current turnover test — your gross sales for the current month plus the previous 11 months. The second is the projected turnover test — your gross sales for the current month plus the next 11 months. If either figure hits $75,000, you are required to register.
Once you cross the threshold under either test, you have 21 days to register. That 21-day window is set by the ATO and is not negotiable. Late registration does not just mean a delay — it means you become liable for GST on all sales made from the date you should have registered, even if you did not charge GST on those invoices. That liability has to come out of your own pocket.
The projected test is the one that catches most people out. If you sign a contract in March that will deliver $80,000 over the next year, the projected test says you must register in March — not when the cumulative figure actually hits $75,000. Founders who only watch the trailing number end up registering late.
The 21-day rule
Late registration creates a backdated GST debt to the ATO. If you cross the threshold in July and only register in November, you owe GST on every sale made since July — out of your own margin.
Voluntary registration below the threshold
Even if you are well under $75,000, the ATO allows voluntary registration. You can register from day one if you want to. Once registered, you must remain registered for at least 12 months, charge GST on every taxable sale, and lodge BAS on the schedule the ATO assigns (usually quarterly for small businesses).
How GST works in plain English
GST is a flow-through tax. You collect 10 percent on top of your prices when you sell, and you can claim back the 10 percent you paid on most business purchases. The difference is what you remit to the ATO each BAS period. In a simple month, if you collected $5,000 of GST on sales and paid $1,500 of GST on supplies, you would send the ATO $3,500.
On the sales side, registered businesses include GST in their pricing. A $100 service becomes $110, and the extra $10 — calculated as 1/11 of the GST-inclusive price — is not yours to keep. It sits in your account until BAS time and then goes to the ATO. Many founders treat it as a separate balance from day one to avoid spending tax money they will need later.
On the purchases side, you can claim GST credits (input tax credits) on most things you buy for the business, as long as the supplier is GST-registered and provides a valid tax invoice. Subscriptions, equipment, fuel, accountant fees, marketing — all generally claimable. Items used for private purposes, GST-free items like fresh food, and purchases from unregistered suppliers do not generate credits.
The 1/11 rule
If a price is GST-inclusive, the GST component is 1/11 of the total — not 10 percent. A $110 invoice includes $10 of GST ($110 ÷ 11 = $10). A $1,100 invoice includes $100 of GST. Getting this maths right matters for your BAS and your pricing.
Should you register voluntarily before $75,000?
Registering before you have to is a judgement call. There is no single right answer, and the trade-offs depend on who your customers are, what you buy to run the business, and how much administration you are willing to take on. Below are the practical considerations — your accountant can tell you what makes sense for your specific numbers.
The case for registering early is strongest when your customers are themselves GST-registered businesses. They claim back the GST you charge them, so to them your price effectively does not change. Meanwhile you get to claim credits on your own purchases — laptops, software, accounting fees, equipment — which can be material in the first year. Some founders also register voluntarily because it signals scale to enterprise clients who expect to deal with GST-registered suppliers.
The case against is strongest when you sell to consumers who cannot claim GST back. Adding 10 percent to your retail prices either reduces your margin or makes you 10 percent more expensive than unregistered competitors. The administrative cost of lodging BAS every quarter is also real — most small businesses pay a bookkeeper or accountant to handle it, which is an ongoing expense.
When voluntary registration usually pays off
Most of your customers are GST-registered businesses, you have meaningful start-up purchases (equipment, fit-out, software), and you are confident you will cross $75,000 within the next 12 months anyway. In that scenario the credits typically outweigh the admin cost, and you avoid the awkward mid-year transition of suddenly adding 10 percent to your invoices.
When it usually does not
You sell to consumers, your margins are thin, and your purchases are small. In that case you are giving away 1/11 of revenue to the ATO and getting back very little in credits. Sole traders running side businesses with modest turnover often sit here and stay unregistered as long as they legitimately can.
BAS, reporting cycles, and what comes after registration
Once registered, you lodge a Business Activity Statement (BAS) on a schedule set by the ATO. Most small businesses are on quarterly BAS — four lodgements a year, due 28 days after each quarter ends (with a small extension if you lodge through a registered tax or BAS agent). Larger businesses with GST turnover over $20 million lodge monthly. Some very small businesses are eligible to lodge annually.
Your BAS reports GST collected on sales, GST credits claimed on purchases, and the net amount payable or refundable. It also typically reports Pay As You Go (PAYG) withholding for employees, PAYG instalments toward your own income tax, and other obligations like fringe benefits tax instalments where they apply. The ATO calculates the net position and either issues you a refund or asks you to pay.
Getting BAS right is a job most founders hand to an accountant or registered BAS agent. The mechanics — coding transactions, separating GST-free items, handling adjustments — get fiddly fast, and mistakes flow through to your income tax return. Talk to your accountant about whether to lodge yourself through ATO online services or have a professional handle it.
Pick your accounting software before you register
Xero, MYOB, and QuickBooks all handle GST tracking automatically once configured. Setting up the software before your first GST-registered invoice saves hours of reconciliation later.
How to register for GST
GST registration runs through the Australian Business Register (ABR) and the ATO. You need an active Australian Business Number (ABN) first — GST registration cannot exist without one. If you already have an ABN, you can add GST through the ATO Business Portal, the ABR website, by phone, or through a registered tax or BAS agent.
If you do not yet have an ABN, you can apply for both at the same time through the Australian Business Register. The combined application takes around 20 minutes if you have your tax file number, business structure details, and a description of your main business activity ready. Approval is usually immediate for sole traders and within a few business days for companies.
Structly handles the ABN and GST registration step as part of the ABN Package ($99) or as part of the Company Essential bundle ($887, which combines company registration, ABN, and a 3-year business name). If you would rather work through it yourself, Stanley can walk you through which path suits your situation.