When do you need to register for GST?

Goods and services tax registration is one of the first compliance decisions a new business faces. Register too late and you may have to pay GST you never collected from customers.

The registration threshold

You must register for GST within 21 days of your GST turnover reaching:

• $75,000 or more for most businesses
• $150,000 or more for non-profit organisations

GST turnover is your total business income, excluding GST, less certain amounts such as input-taxed sales and sales not connected with Australia. It is tested two ways: your turnover for the current month plus the previous 11 months, and your projected turnover for the current month plus the next 11 months. If either reaches the threshold, you must register.

Businesses that must register regardless of turnover

Some businesses must register from day one, whatever their income, including:

• Taxi and ride-sourcing drivers, including rideshare and some delivery platforms
• Businesses that want to claim fuel tax credits

Watch your projected turnover

Projected turnover catches many growing businesses. If you sign a large contract or your sales are climbing fast, you may need to register before your actual income reaches the threshold. Missing this can mean paying one-eleventh of your sales to the ATO from the date you should have registered, without having charged GST to customers.

Should you register voluntarily?

You can register even if you are under the threshold. It may suit you if:

• Your customers are mostly GST-registered businesses that can claim the GST back
• You have large set-up costs and want to claim GST credits on them
• You expect to pass the threshold soon

It may not suit you if your customers are mostly consumers, because adding GST to your prices makes you more expensive compared with unregistered competitors. Registration also means lodging activity statements regularly.

After you register

You must give a tax invoice when a customer asks for one on sales over $82.50 including GST, and tax invoices for $1,000 or more must also show the buyer's identity or ABN. You will lodge a business activity statement monthly, quarterly or annually, depending on your turnover and choice.

Not sure if you need to register? Our BAS, GST and bookkeeping service includes GST consulting, and we can review your projected turnover with you.