Do I Need to Register for GST?

Who has to register for GST

Registration is compulsory once your GST turnover reaches $75,000, or $150,000 for a non-profit organisation. It is also compulsory, whatever your turnover, if you provide taxi or limousine travel to passengers, including ride-sourcing through an app, or if you want to claim fuel tax credits.

Rideshare drivers must be registered before their first trip, not when they reach $75,000. A new business must register if it expects to reach the threshold in its first year. You need an ABN before you can register for GST.

If none of these apply, registration is optional. You have 21 days from the time you become required to register, and the ATO suggests checking your turnover every month.

How to work out your GST turnover

GST turnover is based on your total business income, not your profit. It leaves out the GST included in your sales, input-taxed sales such as residential rent, sales not connected with an enterprise you run, sales not connected with Australia and some sales to associates. GST-free sales count towards GST turnover.

There are two tests and you must register if either reaches the threshold. Current GST turnover is the current month plus the previous 11 months. Projected GST turnover is the current month plus the next 11 months. If your current turnover is over the threshold but the ATO is satisfied your projected turnover will stay below it, you do not have to register.

When projecting, leave out sales of capital assets such as equipment or vehicles, and sales made because you are closing or substantially scaling back the business. For example, the planned sale of your old work vehicle is left out of the projection.

Worked example: when the projected test catches you

Say you are a consultant who billed $55,000 over the past 12 months, so your current GST turnover is below $75,000. In November 2026 you sign a contract that will bill $8,000 a month from that month. Your projected GST turnover for November plus the next 11 months is 12 x $8,000 = $96,000.

Because projected turnover is now over $75,000, you are required to register, and you have 21 days to do it. You would start charging GST on your invoices from your registration date, so a fee of $8,000 plus GST becomes $8,800, and you would claim GST credits on your business purchases.

Should you register voluntarily?

Registering below the threshold lets you claim GST credits on business purchases and set-up costs. It often makes little difference to business customers, because they can claim back the GST you charge. Voluntary registrants with GST turnover under $75,000 can also choose to report GST annually.

The cost is that you must charge GST on taxable sales, which can make you 10% dearer to consumers who cannot claim it back, and you take on BAS lodgment and record-keeping. Once registered voluntarily, you generally need to stay registered for at least 12 months.

• Pro: claim GST credits on purchases and set-up costs
• Pro: little price impact when customers are GST-registered businesses
• Con: prices to consumers effectively rise by 10%
• Con: BAS lodgment and GST record-keeping
• Con: generally locked in for at least 12 months

What happens if you should have registered but did not

If you were required to register and did not, the ATO can make you pay GST on the sales you made from the date you should have been registered, even though you did not charge your customers GST. That GST comes out of your own pocket, and penalties and interest may apply as well.

You can ask the ATO to backdate your registration, generally no more than 4 years unless fraud or evasion is involved. Backdating is requested by phoning the ATO's business enquiries line.

When to get help

The threshold question is usually simple, but the edge cases are not: projected turnover after a big contract, income from several activities, or a rideshare side job alongside other work.

Getting the registration date right matters because GST is owed from that date whether or not you charged it. Acquire Strategic Accounting in Brisbane can check whether you need to register and set up GST correctly in Xero from day one.