How to Register for GST in Australia: A Step-by-Step Guide

Registering for Goods and Services Tax (GST) in Australia is a critical step for a growing business, but it starts with understanding if and when you are required to do so. The primary trigger is reaching a GST turnover of $75,000 or more within any 12-month period, at which point registration with the Australian Taxation Office (ATO) becomes mandatory. Failing to register on time can lead to significant compliance risks, including backdated GST liabilities, financial penalties, and interest charges. This guide provides a step-by-step process to ensure you meet your obligations correctly.

At Baron Tax & Accounting, we often observe new business owners in Brisbane who are excellent at tracking their income but overlook their projected turnover. We've seen sole traders whose monthly revenue steadily increases, pushing them over the annual GST threshold much faster than anticipated. This highlights why monitoring future earnings is just as crucial as reviewing past performance to avoid compliance issues with the ATO.

Understanding Your GST Registration Obligations

Goods and Services Tax (GST) is a 10% tax applied to most goods and services sold in Australia. For a business owner, becoming GST-registered is a significant milestone that introduces new compliance responsibilities but also provides benefits, such as claiming credits for GST paid on business expenses. The first and most important step is to determine exactly when you are legally required to register.

This obligation is determined by your GST turnover, which is your gross business income (not profit), excluding certain items like GST-free sales. The Australian Taxation Office (ATO) has established clear thresholds to define this requirement.

To simplify, here is a quick guide to help you identify if you have reached the mandatory registration point.

Quick Guide: GST Registration Thresholds

This table breaks down the annual turnover thresholds that trigger mandatory GST registration for different types of entities according to ATO rules.

Entity Type	Mandatory GST Turnover Threshold	Key Notes
Most Businesses & Sole Traders	$75,000	This is the most common threshold. You must track your turnover on a rolling 12-month basis, not just within a single financial year.
Non-Profit Organisations	$150,000	Non-profits are granted a higher threshold to accommodate their unique operational and funding structures.
Taxi & Ride-Sourcing	Any Amount	If you provide taxi or ride-sourcing services (e.g., Uber, DiDi), you must register for GST from the first dollar you earn.

Once you understand your position relative to these thresholds, you can proceed with confidence.

The Importance of Timely Registration

Do not delay registration. If you are required to register and fail to do so within the specified timeframe, the ATO can backdate your registration to the day you became liable.

This means you will owe GST on all taxable sales made from that date, even if you did not include it in your customer invoices. In addition to this liability, you may face penalties and interest charges for late compliance. Your GST registration is linked to your business identity, which begins with an ABN. For more information, see our guide on ABN and tax return compliance.

What About Voluntary GST Registration?

Even if your turnover is below the $75,000 threshold, you can choose to register for GST voluntarily.

This can be a strategic decision. Registration allows you to claim back the GST you pay on your business purchases, known as GST credits. However, it also means you must charge GST on your sales and begin lodging regular Business Activity Statements (BAS).

Calculating Your GST Turnover Accurately

Before starting the registration process, you must have a precise understanding of your 'GST turnover'. This is a specific calculation defined by the ATO, and getting it right is crucial. An accurate calculation will tell you exactly when to act, while an incorrect one could lead to late registration penalties or unnecessary administrative burdens from registering too early.

The ATO defines GST turnover as your gross business income—your total earnings before deducting any expenses. Importantly, it is assessed over a rolling 12-month period. This means you must monitor it each month by reviewing the previous 11 months plus the current month.

What is Included in GST Turnover?

Your GST turnover is the total value of all taxable and GST-free sales your business makes.

• Gross income from all business activities: The total amount earned before deducting costs.

• Sales of goods or services: All revenue from your primary business operations.

• Income from exports: Although exports are typically GST-free, their value must be included when calculating your turnover.

If you are unsure what constitutes business income, our guide on how to set up a business in Australia can provide clarity.

What is Excluded from GST Turnover?

Knowing what to exclude is equally important to avoid registering unnecessarily. Ensure you do not include:

• The GST amount already included in your gross sales figures.

• Proceeds from the sale of business assets, such as vehicles or equipment.

• Sales that are not connected with your business activities (e.g., selling personal items).

• Sales made to your business associates that were not for payment.

• Input-taxed sales, such as financial supplies or residential rent.

The ATO specifies: "Your GST turnover is your gross business income (not your profit), excluding any GST included in the price, sales that aren't for payment, sales not connected with your business, input-taxed sales you make, and sales not connected with Australia."

Current vs. Projected Turnover: The Two-Way Test

The ATO requires you to assess two figures:

1. Your current GST turnover: Your turnover for the current month plus the previous 11 months.

2. Your projected GST turnover: Your expected turnover for the current month plus the next 11 months.

If either of these figures meets or exceeds the $75,000 threshold, you have 21 days to register for GST.

Projecting turnover can be challenging, particularly for new or seasonal businesses, but you must have a reasonable basis for your estimates. Consider any upcoming contracts or seasonal peaks that could push you over the threshold.

For example, a Brisbane-based event planner may have low income during winter but land a $60,000 contract in spring. This could easily push their projected annual turnover past the threshold, requiring immediate registration.

The GST Registration Process: A Step-by-Step Guide

Once you have confirmed your need to register for GST, the next step is to understand the process. The application itself is relatively straightforward, but preparing your information in advance is key to ensuring a smooth and compliant setup.

Prerequisite: You Must Have an ABN

Before you can register for GST, you must have an active Australian Business Number (ABN).

This unique 11-digit number is your business's primary identifier for all government interactions, including tax. Your GST registration is directly linked to it, making it a non-negotiable prerequisite.

If you are starting a new business and do not yet have an ABN, this is your first task. If you are already operating, ensure your details on the Australian Business Register (ABR) are up to date. Our guide on how to register as a self-employed sole trader in Australia provides detailed instructions.

Pre-Registration Checklist

Gathering the necessary information before you begin the application will prevent delays and potential errors.

Here is a checklist of what you will need:

• Australian Business Number (ABN): The foundation of your registration.

• Tax File Number (TFN): To verify your identity.

• Proof of Identity Documents: Such as your driver's licence or Medicare card.

• Business Structure Details: Confirm if you are a sole trader, partnership, company, or trust.

• Contact Information: Your primary business address, postal address, email, and phone number.

• Estimated Business Turnover: Your calculated projected GST turnover.

• Bank Account Details: For receiving any potential GST refunds from the ATO.

Methods for GST Registration

The government provides several methods for registration. Choose the one that best fits your needs and comfort level.

Registration Method	Best For	Key Considerations
Online via ABR	DIY business owners comfortable with online government portals.	This is the fastest method. You will need a myGovID linked to your business.
Through a Registered Tax or BAS Agent	Business owners seeking professional assurance and advice.	An agent like Baron Tax & Accounting can ensure accuracy and help you make strategic decisions.
By Phone with the ATO	Individuals who prefer not to use online services.	You can call the ATO directly, but you must have all your information and identity documents ready.
Paper Form (Not Recommended)	For those without reliable internet access.	This is the slowest method and should only be used as a last resort.

Critical Decisions During Registration

The application requires you to make two key decisions that will affect your future GST obligations.

1. Choosing Your GST Registration Date

This is the date from which your GST obligations officially begin. You must register within 21 days of crossing the turnover threshold.

If you have already passed this deadline, you must backdate your registration to the date you were legally required to register. This is essential for accounting for GST on all sales made since that date.

2. Selecting Your GST Accounting Method

You must choose one of two methods for accounting for GST:

• Cash Basis: You report GST in the period when you receive payment from customers and make payments to suppliers. This method is simpler for small businesses as it aligns with cash flow.

• Accruals Basis: You report GST based on the date you issue an invoice or receive a bill, regardless of when payment occurs. This method provides a more accurate picture of business performance but can be more complex to manage.

For most businesses with a turnover of less than $10 million, the choice between cash and accruals is available. This decision directly impacts your Business Activity Statement (BAS) preparation and cash flow management, so it is vital to select the method that best suits your operations.

Life After Registration: Your Ongoing GST Duties

Successfully registering for GST is just the beginning. Once registered, you must adhere to a new set of ongoing responsibilities with the Australian Taxation Office (ATO). Understanding these duties from the outset is key to maintaining compliance and avoiding future issues.

Your primary obligations involve three core activities: issuing compliant invoices, lodging your Business Activity Statements (BAS) on time, and maintaining accurate records to support all your claims.

Issuing Compliant Tax Invoices

Your invoicing practices must change immediately. For any taxable sale exceeding $82.50 (including GST), you are legally required to provide a tax invoice. A standard invoice is no longer sufficient; it must contain specific information as required by the ATO to be valid.

A compliant tax invoice is crucial because your business customers need it to claim a GST credit for their purchase.

Every tax invoice must include:

• The words "Tax Invoice" clearly displayed.

• Your business name and ABN.

• The date of issue.

• A description of the items sold, including quantity and price.

• The GST amount, either listed separately or noted as "Total price includes GST".

• If the sale includes both taxable and GST-free items, each must be clearly identified.

For sales of $1,000 or more, the invoice must also show the buyer's identity or ABN.

Lodging Your Business Activity Statement (BAS)

The Business Activity Statement (BAS) is the cornerstone of your GST compliance. It is the form you use to report the GST collected on sales and to claim GST credits on your business expenses.

Your lodgement frequency depends on your GST turnover:

• Quarterly: The default for most businesses with a GST turnover below $20 million.

• Monthly: Mandatory if your turnover is $20 million or more.

• Annually: An option only for businesses with a turnover under $75,000 that have registered voluntarily.

Accurate and timely BAS lodgement is a legal requirement. For a detailed walkthrough, refer to our guide on how to lodge your BAS correctly.

Claiming GST Credits and Record-Keeping

A key benefit of GST registration is the ability to claim GST credits, which allows you to recover the GST included in the price of goods and services purchased for your business. To claim a credit, you must hold a valid tax invoice from your supplier.

This makes meticulous record-keeping a legal necessity, not just good practice. You must retain records supporting your BAS claims for at least five years.

Your records should include:

• All tax invoices for purchases where you claim GST credits.

• Records of all sales, both taxable and GST-free.

• Copies of all lodged BAS forms and related documents.

Developing strong bookkeeping habits is fundamental to accurate GST reporting and overall business health. While the specifics can vary, the core principles of meticulous record-keeping are universal. Exploring what's covered in a comprehensive Bookkeeping VAT training course can be incredibly helpful for sharpening these essential skills.

FAQ: Common GST Registration Questions

1. Can I claim GST on purchases made before I registered?

Yes, the ATO allows businesses to claim GST credits on certain business purchases made before their GST registration date. This is particularly useful for capital items like equipment or vehicles, as well as initial stock. To be eligible, you must hold a valid tax invoice and have purchased the items for use in making sales that would be subject to GST. According to ATO guidance (QC 25253), you can claim these credits in your first Business Activity Statement (BAS).

2. What happens if I register for GST too late?

Failing to register within 21 days of reaching the turnover threshold can have serious consequences. The ATO will likely backdate your registration to the date you were required to register. This means you will be liable for 10% GST on all taxable sales made from that date, which you must pay even if you didn't charge it to your customers. You may also face penalties for failure to lodge and be charged interest on the outstanding GST amount.

3. How do I cancel my GST registration?

You can apply to cancel your GST registration if your business closes, is sold, or if your GST turnover falls below the $75,000 threshold (and you no longer wish to be voluntarily registered). Before the ATO approves the cancellation, you must have lodged all outstanding BAS and paid any tax debts. Be aware that upon cancellation, you may need to make a final GST payment on any business assets you still hold for which you previously claimed GST credits.

4. Do I need to register for GST if I only sell GST-free items?

No. If your business exclusively sells GST-free goods and services (e.g., most basic foods, certain medical services), you are not required to register for GST, even if your turnover exceeds the $75,000 threshold. However, if you sell a mix of taxable and GST-free items, you must register once your turnover from taxable sales reaches the threshold.

Summary: Key Takeaways for GST Registration

Successfully registering for GST is a fundamental step in scaling your business in Australia. Proactive management of your turnover is essential to ensure you register on time and avoid ATO penalties.

• Know Your Threshold: Registration is mandatory once your current or projected GST turnover reaches $75,000 ($150,000 for non-profits).

• Prepare in Advance: Have your ABN, TFN, and other business details ready before starting the application to ensure a smooth process.

• Make Strategic Choices: Your decisions on registration date and accounting method (cash vs. accruals) will have long-term impacts on your cash flow and compliance workload.

• Understand Ongoing Duties: Registration is the start. You must issue compliant tax invoices, maintain accurate records for five years, and lodge your Business Activity Statements (BAS) on time.

Seek Professional Guidance

Navigating GST obligations can be complex. The information provided is for general guidance only and does not constitute personalised financial advice. To ensure your business is fully compliant and structured for optimal financial health, we recommend seeking professional advice.

Contact Baron Tax & Accounting for expert assistance tailored to your specific business needs.

Baron Tax and Accounting

• Website: https://www.baronaccounting.com

• Email: info@baronaccounting.com

• Phone: +61 1300 087 213

• Whatsapp: 0450468318

• Line: Barontax