Chartered Accountant Timothy Quinn leads Tax & Accounting at Lawpath. 16+ years in tax advisory, specialising in startup growth and expansion. Passionate about supporting entrepreneurial clients with early-stage investment incentives, restructuring, international exit strategy planning, and more.
If you run a business in Australia, you may need to register for goods and services tax (GST). Registration is compulsory once your GST turnover reaches the relevant threshold, but it can also be mandatory for certain industries, including taxi and rideshare services.
This guide explains when GST registration is required, whether you should register before reaching the threshold, and what to do once you are registered.
What is GST?
GST is a 10% tax that generally applies to taxable goods and services sold in Australia.
Registering for GST means your business will generally need to:
- Charge GST on taxable sales.
- Report GST through Business Activity Statements (BAS).
- Pay GST collected to the Australian Taxation Office (ATO).
- Claim eligible GST credits for GST included in qualifying business purchases.
Whether you need to register depends mainly on your GST turnover, although special rules apply to some businesses and activities.
Mandatory GST registration
You must register for GST if you own an enterprise and your GST turnover reaches, or is expected to reach, the relevant registration threshold.
The main GST registration triggers are:
- Your GST turnover is $75,000 or more for most businesses and enterprises.
- Your GST turnover is $150,000 or more if you are a non-profit organisation.
- You provide taxi, limousine, or rideshare services, regardless of turnover.
- You want to claim fuel tax credits and are required to register for GST to do so.
Once registration becomes compulsory, you have 21 days to register.
GST turnover threshold
For most businesses, the GST registration threshold is $75,000 in GST turnover. For non-profit organisations, the threshold is $150,000.
Importantly, this threshold is based on GST turnover, not profit.
A business should consider whether it has reached, or is likely to reach, the threshold. You can’t just wait until your accounting-year revenue finally totals $75,000 before acting.
The ATO considers both:
- Your current GST turnover, which includes turnover for the current month and the previous 11 months.
- Your projected GST turnover, which includes the current month and the following 11 months.
If you are approaching the threshold, review your monthly turnover and seek professional advice if the position is unclear.
Should you register for GST before you reach $75,000?
If you haven’t reached the threshold, you can still register voluntarily, as long as you have an ABN.
Whether it makes commercial sense depends on:
- Your customers
- Your pricing model
- Your GST-bearing expenses
- Your expected growth
- Your willingness to manage BAS and GST record-keeping
The key question is not simply whether registration has benefits. It’s whether the likely GST credits and commercial advantages outweigh the effect of charging GST and taking on ongoing compliance obligations.
| Registering early may make sense when | Waiting may make more sense when |
|---|---|
| You expect to exceed $75,000 soon | Revenue is likely to remain well below the threshold |
| You have significant GST-bearing business expenses | Your business has relatively few GST-bearing expenses |
| You want to claim eligible GST credits | GST credits would be relatively small |
| Most customers are GST-registered businesses | Most customers are consumers who ultimately bear the additional GST |
| You are comfortable with ongoing BAS obligations | You want to minimise compliance while the business is very small |
Let’s look at the main considerations in more detail.
GST credits
Once registered, you can claim GST credits for GST included in eligible business purchases. This can make voluntary registration more attractive if you have substantial start-up, equipment, software, inventory, marketing, or operating costs that include GST.
GST credits are not available for every expense, so review your projected purchases carefully before pursuing voluntary registration.
Customer type and pricing
Your customer base is often one of the most important factors when deciding whether to register voluntarily.
For a business selling mainly to other GST-registered businesses, adding GST may have less commercial impact. Those customers can usually claim the GST component as a credit.
For consumer-facing businesses, the decision can be more difficult. You need to decide whether to:
- Increase the final customer price by 10%.
- Absorb some or all of the GST within its existing price.
- Adjust pricing gradually as the business approaches the registration threshold.
BAS and administration
GST registration brings ongoing reporting requirements. Registered businesses need to lodge BAS to report GST collected on sales and GST credits claimed on eligible purchases.
You will also need systems to:
- Keep GST records.
- Identify taxable, GST-free, and input-taxed transactions.
- Issue tax invoices where required.
- Track GST collected and GST paid.
- Lodge BAS and pay any net GST payable by the due date.
Expected growth
Voluntary registration may be practical if you expect to exceed $75,000 shortly after starting your business.
Registering early can help you set up pricing, invoicing, bookkeeping, and BAS processes from the beginning. This may be easier than changing systems, customer communications, and price lists soon after launch.
What happens after you register for GST?
Once your GST registration takes effect, you should take practical steps to manage your new obligations.
You will generally need to:
- Begin charging GST on taxable sales from the effective registration date.
- Update quotes, contracts, invoices, and pricing where necessary.
- Issue tax invoices where required.
- Keep records of sales, purchases, and GST amounts.
- Lodge BAS or, where eligible, an annual GST return.
- Pay the net GST owed to the ATO.
- Claim eligible GST credits on business purchases.
- Review whether registration remains appropriate if your circumstances change.
If you’re unsure how to manage GST and BAS obligations, get advice from a registered BAS agent.
What happens if you reach the GST threshold and register late?
If you register late, the ATO might backdate your registration to the date you were supposed to sign up. This can cause cashflow problems, as you will owe GST on sales from that date, even if you didn’t collect it from your customers.
Depending on the situation, you may also have to pay extra fees or interest.
Taxi and rideshare services
Taxi, limousine, and rideshare drivers have to follow a different set of rules. They must register for GST regardless of whether they reach the usual $75,000 GST turnover threshold.
If you already have an ABN but begin providing rideshare services, you’ll have 21 days to register for GST.
If you only deliver and don’t provide passenger transport, these rules may not apply. For example, delivery-only work may not automatically trigger the special taxi and rideshare GST registration rule, although normal turnover-based registration rules still apply.
Conclusion
In summary, GST is a tax businesses charge on their goods and services. The ATO keeps track of who’s collecting GST through GST registration.
You will have to register for GST if you are carrying on an enterprise that meets the GST turnover threshold. If you offer taxi, limousine, or ride-sharing services, you have to register for GST regardless of your turnover.
You can also register for GST voluntarily to claim certain tax credits and improve your business image.
To get help with accounting and tax laws, contact Lawpath’s professional legal team and ensure business tax compliance from day one.
