GST in Australia: registration, tax invoices and BAS explained

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GST in Australia is a 10% tax on most goods and services sold in the country. Businesses register once their turnover reaches $75,000, charge GST on their sales, claim credits for GST in their purchases, and report through the Business Activity Statement. The rules are straightforward compared with many countries, but details such as tax invoice requirements, GST-free items and reporting methods trip up new businesses. This guide explains each part, plus the rules for overseas businesses selling to Australians.

How GST works in Australia

The Goods and Services Tax is a broad-based tax of 10% on most goods, services and other items sold or consumed in Australia. Registered businesses include GST in their prices, collect it from customers, and pay it to the Australian Taxation Office (ATO). They can claim credits for the GST included in the price of things they buy for the business. The net amount, GST collected minus GST credits, is reported and paid through the Business Activity Statement (BAS).

Use our Australia GST calculator to add or remove GST from prices.

When you must register

You must register for GST if your business has a GST turnover of $75,000 or more, or $150,000 or more for non-profit organisations. GST turnover is your gross business income, excluding GST, sales that are input-taxed and sales not connected with Australia. You must register within 21 days of reaching the threshold. Some businesses must register regardless of turnover, including taxi and ride-sourcing drivers, and businesses that want to claim fuel tax credits.

You need an Australian Business Number (ABN) to register for GST. Registration is done online, through a registered tax agent, or by phone.

Voluntary registration

Businesses below the threshold can register voluntarily. It can make sense if you sell mainly to GST-registered businesses, who can claim the GST back, or if you have large start-up costs and want to claim GST credits on them. The downside is extra admin and the need to add GST to prices, which may make you more expensive for consumers. If you register voluntarily, you generally need to stay registered for at least twelve months.

Taxable, GST-free and input-taxed sales

• Taxable sales include GST at 10%. Most goods and services fall here.
• GST-free sales do not include GST, but you can still claim credits for GST on related purchases. Examples include most basic food, some health and medical services, some education courses, exports and some childcare.
• Input-taxed sales do not include GST, and you cannot claim credits for GST on related purchases. Examples include financial supplies and residential rent.

Getting these categories right matters for both pricing and credits. Set up product codes in your software accordingly.

Pricing with GST

Prices offered to consumers must generally include GST, under Australian consumer law. B2B quotes may show prices excluding GST if that is clear. When registered, the GST in a GST-inclusive price is one eleventh of the price. For example, a $110 price includes $10 GST. If you register after already setting prices, decide whether to keep prices the same and absorb the GST, or raise them.

Tax invoices

A tax invoice is required for your business customers to claim GST credits on purchases of more than $82.50 including GST. You must provide one within 28 days if a customer asks. A tax invoice must show that it is a tax invoice, your identity and ABN, the date, a description of what was sold, the GST amount (or that the total includes GST), and, for sales of $1,000 or more, the buyer's identity or ABN.

Most invoicing software creates compliant tax invoices automatically. Our free invoice generator can produce a simple invoice, though it does not file anything with the ATO.

Claiming GST credits

You can claim GST credits for GST included in the price of purchases used for your business, provided you hold a valid tax invoice for purchases over $82.50 including GST. You cannot claim credits for private use, for purchases related to input-taxed sales, or where you lack the required documentation. Claims must generally be made within four years.

The Business Activity Statement

Registered businesses report GST on the BAS, along with other obligations such as PAYG withholding for employees and PAYG instalments for income tax. Most small businesses lodge quarterly. Businesses with GST turnover of $20 million or more must report monthly, and voluntarily registered businesses below the threshold may be able to report annually.

Quarterly BAS are generally due on the 28th of the month after the quarter ends, with a later date for the December quarter. Lodging through a registered agent may give extra time. You can lodge online through the ATO's business portal, your accounting software or a tax agent.

Accounting methods: cash or accrual

Small businesses with turnover under $10 million can usually account for GST on a cash basis, reporting GST when they receive payment from customers and claiming credits when they pay suppliers. Larger businesses use the accrual basis, reporting GST when invoices are issued or received. Cash accounting helps cash flow, because you do not pay GST on sales before customers pay you.

Simpler BAS reporting

Small businesses with GST turnover under $10 million generally use Simpler BAS, which requires reporting only total sales, GST on sales and GST on purchases. This reduces the information you need to collect. Accounting software calculates these amounts from your transactions if they are coded correctly.

Selling to Australians from overseas

Overseas businesses that sell digital products, services or low-value imported goods (valued at A$1,000 or less) to Australian consumers must register for GST once their Australian sales reach $75,000. Most can use the simplified GST registration, which is quick and does not require an ABN, but does not allow claiming GST credits. Business-to-business sales are generally not subject to these rules if the buyer is registered for GST and provides their ABN.

If you sell software subscriptions or online courses to Australian consumers, track your Australian sales and register when you reach the threshold. See our Australia page for global tools priced in Australian dollars.

E-invoicing and Peppol

Australia has adopted the Peppol framework for e-invoicing. It is available and encouraged by the ATO, and government agencies pay e-invoices faster, but it is not mandatory between businesses. Many accounting tools support sending and receiving e-invoices through Peppol. Using it reduces data entry and fraud risk, and may become more common as larger businesses adopt it.

Payroll and Single Touch Payroll

If you employ staff in Australia, you must report payroll information to the ATO each payday through Single Touch Payroll (STP), withhold PAYG tax, and pay superannuation guarantee contributions. PAYG withholding is reported on the BAS alongside GST. Choose payroll software that supports STP; most accounting tools in Australia include it. For hiring in Australia from abroad, see global payroll explained and what an employer of record is.

Software for GST

Accounting software that supports Australian GST codes, BAS reporting, Peppol e-invoicing and STP makes compliance much simpler. Compare options in the accounting software ranking and invoicing ranking. For online stores, configure GST-inclusive pricing in your platform; see the e-commerce ranking and Shopify vs Wix.

Common mistakes

• Not registering within 21 days of reaching $75,000 turnover.
• Showing consumer prices without GST.
• Claiming credits without valid tax invoices.
• Treating GST-free and input-taxed sales the same.
• Missing BAS deadlines.
• Overseas sellers not registering for simplified GST.

Example: a café crossing the threshold

A café in Melbourne passes $75,000 in turnover and registers for GST within 21 days. Hot drinks and prepared meals are taxable, so their prices now include GST, and the café decides to raise prices slightly rather than absorb the full 10%. Some packaged basic foods it sells for takeaway, such as plain bread or milk, may be GST-free, so the point-of-sale system codes items carefully. The café claims GST credits on coffee machines, rent and supplies where it holds tax invoices.

Each quarter, the café's accounting software, connected to the POS, prepares the BAS figures. The owner reviews them and lodges online. See how to choose a POS system for POS options that code GST correctly.

Example: an overseas SaaS company

A software company in Kenya sells subscriptions to Australian freelancers and small businesses. Sales to Australian businesses that provide an ABN and are registered for GST are B2B and not subject to the overseas digital services rules. Sales to consumers and unregistered customers count towards the $75,000 threshold. Once those sales reach the threshold, the company registers for simplified GST, adds 10% GST to Australian consumer prices, and lodges quarterly returns.

It configures its billing system to collect customers' ABNs and check whether they are GST-registered, so B2B sales are treated correctly. For pricing internationally, see how to invoice international clients.

Imports and GST

GST is charged on most goods imported into Australia. For goods above A$1,000, GST is collected at the border by the Australian Border Force along with any duty. For low-value goods sold to consumers, overseas sellers registered for GST collect it at the point of sale. Registered businesses importing goods for their business can claim the import GST as a credit, and some can defer paying import GST until their BAS under the deferred GST scheme, which helps cash flow.

Adjustments, refunds and bad debts

If a sale is cancelled, a price changes or a customer returns goods after you have reported GST, you make an adjustment in the BAS for the period in which you become aware of it, and issue an adjustment note to registered customers if required. If a customer never pays and you account on an accrual basis, you may be able to claim a decreasing adjustment for the GST on the bad debt after a set period. Cash-basis businesses do not need this, since they only report GST when paid.

Cancelling GST registration

If your turnover falls below the threshold, you can cancel your GST registration, generally after twelve months of registration. You must lodge a final BAS and may need to account for GST on assets you hold at cancellation. Before cancelling, consider whether your customers are mainly businesses that benefit from your registration, and whether you expect turnover to rise again.

A quarterly BAS checklist

1. Make sure every sale and purchase for the quarter is recorded with the right GST code.
2. Check you hold tax invoices for purchases over $82.50 where you claim credits.
3. Reconcile bank accounts and payment processor reports.
4. Review GST-free and input-taxed items.
5. Include PAYG withholding if you have employees.
6. Lodge and pay by the due date.

Questions