Who Has to Pay GST in Australia?

Getting GST right is one of those nuts-and-bolts tasks that every Australian small business has to figure out early. The rules can feel confusing at first, but once you understand who has to register, how to charge GST on your invoices, and when to lodge your BAS, it becomes part of your regular rhythm.

In this guide, we’ll break down exactly who has to pay GST in Australia, how the GST turnover threshold works, what to do if you sell online or import goods, and practical steps to set up your systems so you stay compliant without derailing your cash flow.

What Is GST And How Does It Work For Small Businesses?

Goods and Services Tax (GST) is a 10% tax on most goods and services sold in Australia. If your business is registered for GST, you generally add 10% to your taxable sales, collect it from your customers, and later pay it to the ATO via your Business Activity Statement (BAS). You can usually claim credits (called input tax credits) for the GST included in the price of business purchases.

Not all sales are treated the same:

• Taxable supplies: Most goods and services. You charge 10% GST and can claim input tax credits on your purchases.
• GST-free supplies: Certain products/services (for example, most basic foods and some health services). You don’t charge GST, but you can still claim input tax credits.
• Input-taxed supplies: Certain financial supplies and residential rent. You don’t charge GST and generally can’t claim input tax credits on related purchases.

The practical effect: if you’re registered, you add the 10% to taxable sales, track GST collected vs GST paid, and report the net to the ATO at each BAS period.

Who Has To Register And Pay GST?

Whether you must register comes down to your GST turnover and the type of activities you carry out.

GST Turnover Threshold

You must register for GST if your GST turnover is or is projected to be $75,000 or more in a 12‑month period (or $150,000 for not‑for‑profits). GST turnover is your gross business income excluding GST, but including most taxable and GST‑free sales.

If you’re under the threshold, registration is voluntary. Many small businesses still register because their clients expect tax invoices or because it allows them to claim input tax credits. But weigh up the admin cost vs benefit for your situation.

Ride‑Sourcing And Taxis

If you provide ride‑sourcing (e.g. rideshare) or taxi travel, you must register for GST from your first dollar of income, regardless of turnover.

Overseas Sellers To Australian Consumers

Non‑resident businesses that sell digital products, services, or low‑value goods to Australian consumers may need to register for GST if they meet the $75,000 turnover test in Australia. This is a specialist area - if this applies, it’s worth getting advice early so your pricing and checkout flows are set up correctly.

Importers

If you import goods, GST can apply on entry at the border. If this is part of your model, make sure you understand GST on importation and how it interacts with your input tax credits so you don’t double‑pay or miss credits you’re entitled to.

What Counts Towards The $75,000 GST Turnover Threshold?

Getting the threshold right is important because it dictates whether you must register.

Include

• Most sales of goods and services you make in Australia (taxable and GST‑free).
• Sales by any business entity type (sole trader, partnership, company or trust) - the test applies to the entity carrying on the enterprise.
• Your projected sales if you reasonably expect to cross the threshold within the next 12 months.

Exclude

• Input‑taxed supplies (for example, residential rent, many financial supplies).
• Sales not connected with Australia.
• Amounts you receive that aren’t consideration for a supply (for example, some government grants may be outside the scope - check the specific grant terms).
• Sale of business assets as part of selling your whole enterprise (special rules can apply).

If you’re approaching the threshold, it’s better to plan for registration ahead of time. Switching to GST pricing overnight without warning your customers can cause friction, especially on long‑term quotes or proposals.

How To Register For GST And Set Up Your Invoices

If you’ve decided (or are required) to register, it’s best to get the foundations right so invoicing and reporting are smooth.

Registering For GST

You’ll need an ABN and can register for GST online via the ATO/ABR. If you’re trading through a company, make sure your ASIC registrations and internal governance (such as your Company Constitution if applicable) are in order, and that your accounting software is configured for GST from day one.

Tax Invoices: What To Include

Once registered, you must issue a tax invoice for taxable sales of $82.50 (including GST) or more if requested. A compliant tax invoice generally includes:

• Your business name and ABN.
• Invoice date and a clear description of the items sold.
• The price, showing the GST amount or stating that the price includes GST.
• For invoices of $1,000 or more, the customer’s identity or ABN.

If your customers are businesses that self‑invoice (for example, in some supply chains and marketplaces), ask whether they need to use a Recipient Created Tax Invoice arrangement and get the right agreement in place.

Set Clear Payment Terms

Clear invoice terms help reduce late payment and keep your BAS cash flow predictable. Consider documenting your payment terms in your customer contracts, purchase orders or website checkout so there’s no confusion about due dates, surcharges, or how GST is treated in the price.

Online sellers should also ensure their checkout and E‑commerce Terms and Conditions specify whether prices include GST and how tax is calculated at checkout (especially for mixed baskets with GST‑free items).

How Do I Pay GST To The ATO? BAS, Due Dates And Cash Flow Tips

Registering for GST is only the start. You’ll also need to report and pay GST to the ATO on a regular cycle.

Choose Your BAS Cycle

• Quarterly BAS is standard for many small businesses. You report the GST you’ve collected and claim credits for the GST you’ve paid on business purchases.
• Monthly BAS might suit you if you’re regularly in a net refund position (for example, due to large input tax credits).
• Annual GST reporting is available to some businesses under the threshold who voluntarily register (you still make installment payments during the year if applicable).

Cash vs Accrual Accounting For GST

You can account for GST on a cash basis (GST is attributed when you receive or pay the money) or an accrual basis (GST is attributed when you issue or receive an invoice). Cash basis often helps small businesses align GST with cash flow, but choose what fits your model and bookkeeping processes.

Managing BAS Cash Flow

• Set up a dedicated tax savings account and move the GST component from each customer payment across regularly.
• Keep receipts/tax invoices for your business purchases so you can claim input tax credits in the right period.
• Automate with accounting software so GST coding is consistent, especially for mixed supplies (taxable vs GST‑free).
• Use clear invoice clauses and late fee policies to reduce overdue accounts; if you intend to charge a fee, make sure it aligns with late payment fee rules.

Common GST Scenarios For Small Businesses (With Examples)

Service Business Over The Threshold

You run a marketing consultancy and your projected income is $110,000 this financial year. You must register for GST, add 10% to your taxable invoices, and lodge a BAS (usually quarterly). You can claim input tax credits on business purchases, such as software subscriptions and office equipment.

Online Store With Mixed Supplies

You sell a mix of taxable products and a few GST‑free items (for example, certain health products). Your website should clearly display whether prices are inclusive of GST and calculate tax correctly at checkout. It’s good practice to reinforce this in your online terms and ensure your receipts identify the GST component.

Importing Inventory

You import stock regularly. GST may be payable at the border, but you can usually claim this as an input tax credit if the goods are for your enterprise. Track import GST carefully and reconcile it against your BAS so you don’t miss credits. If imports are a core part of your model, review your processes against GST on importation best practices.

Ride‑Sourcing Contractor

You drive for a rideshare platform on weekends and earn $25,000. Because ride‑sourcing is treated like taxi travel, you must register for GST from your first dollar, charge GST on your fares (the platform may handle this mechanically), and lodge BAS even though you’re below $75,000.

Selling Digital Services To Australian Consumers From Overseas

You’re a non‑resident business selling subscription software to Australian consumers. If your Australian sales are $75,000 or more in a 12‑month period, you may need to register for GST, collect it at checkout, and lodge simplified returns. This requires careful scoping and system setup so you remain compliant without over‑collecting tax.

Pricing, Advertising And Contract Clauses: Get GST Right In Writing

Pricing transparency is critical. Under the Australian Consumer Law (ACL), displayed prices to consumers generally need to be inclusive of GST where applicable. Make sure your product tags, website listings and quotes reflect the correct total price. It’s also wise to sense‑check those displays against your obligations under advertised price laws.

Quotes, Proposals And Contracts

Always state whether prices are “inclusive of GST” or “plus GST” to prevent disputes. If your projects span months, consider adding a clause that allows for adjustments if your GST status changes (for example, if you move from unregistered to registered). For clients who need formal documentation, ensure your purchase orders and invoices are aligned on GST treatment.

Invoices And Checkout Flows

Invoicing and online checkout pages should display either the total price including GST or clearly show the GST amount. If you sell online, align your checkout, tax invoice and terms and conditions so customers see consistent tax treatment at every touchpoint. Where you collect customer information for invoicing, a straightforward Privacy Policy helps explain what data you collect and why.

Payment And Collections

Make sure your payment clauses cover due dates, methods, and any surcharges. If you use direct debit or subscriptions, ensure your processes reflect Australian payment and consumer laws, and that your terms work alongside your payment terms and any late fee approach that complies with late fee rules.

Recipient Created Tax Invoices (RCTIs)

Some industries use RCTIs where the buyer issues the invoice on your behalf (for example, produce markets or certain platform arrangements). If you’re operating in one of these supply chains, make sure you have the right RCTI agreement in place and that your accounting matches the RCTI rules so you don’t miss or duplicate GST.

Key Takeaways

• You must register for GST if your GST turnover is $75,000 or more (or from your first dollar if you provide taxi or ride‑sourcing services).
• Once registered, charge 10% GST on taxable supplies, issue compliant tax invoices and claim input tax credits on eligible business purchases.
• Pick a BAS cycle (monthly, quarterly or annual) and an accounting basis (cash or accrual) that fits your cash flow and recordkeeping.
• Online stores and importers have extra moving parts - align your checkout, invoices and contracts, and understand GST on importation to avoid errors.
• Be clear in writing whether prices are inclusive of GST, and ensure your advertising and invoice terms follow ACL pricing rules.
• Good systems and clear terms reduce BAS surprises; where your arrangements are complex, getting tailored legal guidance early can save time and cost.

If you’d like a consultation about GST wording in your contracts, invoices or online terms, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no‑obligations chat.