GST for Small Business: The Plain-English Guide

If you're running a small business or freelancing in Australia, GST is one of the first things you need to understand. Here's everything you need to know — without the jargon.

When Do You Need to Register?

You must register for GST if your business has a GST turnover of $75,000 or more per year (or $150,000 for non-profit organisations). Turnover means your total business income, not profit. If you're a taxi or ride-share driver, you must register regardless of turnover.

You can voluntarily register below $75,000. This makes sense if your customers are businesses that claim GST credits — they won't care about the extra 10%, and you can claim GST credits on your business expenses.

How GST Works

You charge 10% GST on most goods and services you sell. You also pay GST on most business purchases. The difference between GST collected and GST paid is what you owe (or are owed) by the ATO. If you collected $5,000 in GST from sales but paid $2,000 in GST on expenses, you owe $3,000.

GST-Free Items

Some things don't attract GST: most basic food (fresh fruit, vegetables, bread, meat, dairy), health and medical services, education courses, childcare, exports, and some financial services. If you sell a mix of taxable and GST-free items, you need to track them separately.

BAS Lodgement Basics

You report and pay GST via a Business Activity Statement (BAS). Small businesses (under $20M turnover) can lodge quarterly. Lodgement is due 28 days after the end of each quarter — but if you use a registered tax agent, you get extended deadlines. Missing BAS deadlines attracts penalties.

The simplest BAS method for small businesses is the instalment amount method — the ATO calculates a GST instalment for you based on your previous year, and you just pay that amount quarterly. At year-end, you do an annual reconciliation.

For your personal tax situation, use our Income Tax Calculator. Running a side hustle? The Take-Home Pay Calculator shows what you actually keep.