When do I need to register for GST?

Most small businesses only have to register for GST once their turnover reaches the threshold. Some businesses, such as taxi and ride-sourcing drivers, must register from the start. Here are the rules as the ATO sets them out.

When you must register for GST

The ATO says you must register for GST:

• when your business or enterprise has a GST turnover of $75,000 or more
• when you start a new business and expect your turnover to reach the GST threshold (or more) in the first year
• if your non-profit organisation has a GST turnover of $150,000 per year or more
• when you provide taxi or limousine travel for passengers (including ride-sourcing), regardless of your GST turnover
• if you want to claim fuel tax credits for your business or enterprise.

The ATO’s registering page also lists earning income through the sharing economy or digital platforms, such as food delivery or other platform-based work. For people providing services through the sharing economy, the ATO’s sharing economy guidance links registration to a GST turnover of $75,000 or more. Ride-sourcing has its own rule, set out below. If you earn money through a platform, read the ATO’s guidance for your activity and check with your registered tax agent.

You only need to register once, even if you run more than one business.

How to work out your GST turnover

GST turnover is your total business income, not your profit, less certain exclusions. The ATO describes it as your gross income from all businesses, minus GST.

You check it 2 ways. You must register if either one reaches the threshold:

• Current GST turnover: your total turnover for the current month and the previous 11 months.
• Projected GST turnover: your total turnover for the current month and the next 11 months.

This means you don’t wait until the end of a financial year. If your turnover for the last 12 months, or your expected turnover for the next 12 months, reaches $75,000, you need to register.

Taxi, limousine and ride-sourcing

The ATO says the standard $75,000 GST turnover rule does not apply to ride-sourcing. For ride-sourcing:

• You must be registered for GST before your first trip.
• You need an ABN to register for GST.
• If you already have an ABN but haven’t registered for GST, you must register within 21 days from when you start providing ride-sourcing services.
• You can choose to report GST monthly or quarterly. You can’t choose annual reporting.

Penalties and interest may apply if you don’t register.

The time limit to register

Once you’re required to register for GST, the ATO says you need to do so within 21 days.

If you don’t register when you’re required to, you may have to pay GST on sales you made since the date you were required to register. Penalties and interest may also apply. The ATO says backdating a GST registration is limited to 4 years.

Voluntary registration

If you don’t fit any of the situations above, registering for GST is optional. If you choose to register, the ATO says you generally must stay registered for at least 12 months.

Being registered means you can claim GST credits on your business purchases, but you also have to charge GST and lodge activity statements. Talk to your accountant or registered tax agent about whether voluntary registration suits your business.

What registering means for you

Once you’re registered, the ATO says you need to:

• include GST in your prices. GST is a tax of 10% on most goods, services and other items sold or consumed in Australia.
• issue tax invoices for your taxable sales
• claim credits for the GST included in the price of goods and services you buy for your business
• lodge activity statements or annual returns to report your sales and purchases.

How often you lodge a BAS

Once registered for GST, you lodge a business activity statement (BAS). How often depends on your GST turnover:

GST turnover	Reporting cycle
$20 million or more	Monthly
Less than $20 million	Quarterly, unless the ATO has told you to report monthly
Voluntarily registered (under $75,000, or $150,000 for not-for-profit bodies)	Annual reporting is an option

The ATO issues your BAS about 2 weeks before the end of your reporting period, and the lodgement and payment date is shown on the statement.

If you’ve fallen behind with your BAS, see overdue BAS.

Step by step

1. Get an ABN first. You need an ABN before you can register for GST. See how to get an ABN.
2. Work out your GST turnover. Check both your current and projected turnover against the $75,000 threshold ($150,000 for non-profits).
3. Check the special rules. If you provide taxi, limousine or ride-sourcing travel, you must register regardless of turnover. You must also register if you want to claim fuel tax credits.
4. Register within 21 days of becoming required to. You can register through Online services for business, by phoning the ATO’s Business enquiries line, or through your registered tax agent or BAS agent. Ride-sourcing drivers must be registered before their first trip.
5. Update your prices and invoices. Include GST in your prices and issue tax invoices for taxable sales.
6. Set up your records for BAS. Keep track of GST on your sales and purchases so you can lodge your BAS on time.

Important things to know

• Watch your turnover as you grow. The threshold is tested on a rolling 12-month basis. A few strong months can push your current or projected turnover over $75,000.
• Late registration can cost you. If you register late, you may have to pay GST on sales made since the date you were required to register, plus penalties and interest.
• Voluntary registration is a commitment. You generally have to stay registered for at least 12 months.
• Ride-sourcing is different. Register before your first trip, whatever your turnover, and you can’t report annually.
• Plan for the GST you collect. The GST you charge customers is not your money. Setting it aside can help you pay your BAS on time. If you can’t pay, contact the ATO early. See what happens if you can’t pay the ATO.
• Get advice for your situation. Talk to your accountant or registered tax agent if you’re unsure whether you need to register.