Guides / GST
GST for sole traders, explained
Do you need to register? What do the different GST codes actually mean? Here's GST without the jargon.
What GST is
Goods and Services Tax (GST) is a flat 10% tax added to the price of most goods and services sold in Australia. A GST-registered business collects it from customers on sales, and can claim back the GST it pays on business purchases — the difference is what gets paid to (or refunded by) the ATO.
Do you need to register?
You must register for GST once your business's GST turnover reaches $75,000 a year (or is expected to). Below that, registration is optional — some sole traders register anyway because it lets them claim GST credits on business purchases, but it also means charging GST and lodging a BAS, so it's a genuine trade-off worth weighing with your accountant.
One exception: if you drive for a ride-sourcing platform (like Uber or a taxi service), you must register for GST regardless of turnover — even if you'd earn far less than $75,000.
Once you're registered
- You add 10% GST to the price of taxable sales and show it on a tax invoice.
- You can claim GST credits for the GST included in your business purchases.
- You lodge a Business Activity Statement (BAS) — see our BAS basics guide — reporting what you collected and what you paid.
- Your prices to customers must be shown GST-inclusive (Australian Consumer Law).
The three GST treatments
Not everything is taxed the same way. Every sale falls into one of three categories:
GST (taxable)
Standard 10% GST applies. This is the default for most goods and services sold in Australia.
GST-free
No GST is added. Covers things like basic food, some health and education services, and exports.
Input-taxed
No GST is charged, and no GST credits can be claimed on related purchases. Covers things like residential rent and most financial supplies.
Getting the treatment right per line matters — charging GST on a GST-free sale overcharges your customer and misreports your BAS; missing it on a taxable sale underpays the ATO.
How the 10% is actually calculated
If you have the GST-exclusive price, GST is 10% of it. If you only have the GST-inclusive total (what the customer paid), the GST component is 1/11th of that total — so a $110 sale includes exactly $10 of GST.
If your turnover drops
If your GST turnover falls below $75,000 and you no longer want to be registered, you can apply to cancel your registration. You'll need to stop charging GST and issuing tax invoices from your cancellation date, and lodge a final BAS.
Getting the GST split right, automatically
Billaroo applies the correct GST treatment to every invoice line and expense, rounds it the way the ATO expects, and rolls the totals up into your GST/BAS figures as you go — so there's no manual 1/11th arithmetic at BAS time.
This guide is general information, not tax advice — registration thresholds and rules can change, so confirm your own position with the ATO or a registered tax or BAS agent.