GST in Australia is 10%, flat, with no reduced rates and no registration allowance to soften the edge. You are either registered and charging it on everything taxable, or you are not registered and charging none of it. The line between those two states is $75,000 of GST turnover, and it is measured on a rolling basis that catches a lot of people out. This guide covers exactly how the threshold is tested, what happens in the 21 days after you cross it, how the BAS cycle works, what you can claim back, and when registering early is the smarter commercial call.
The rule in one paragraph
You must register for GST if your GST turnover is $75,000 or more ($150,000 for a non-profit body), and you must do it within 21 days of becoming aware that you have crossed or will cross that line. That is the whole rule as stated by the ATO. Everything else is detail about what counts as turnover and when the clock starts. Registration is done through the Australian Business Register, online services for business, or your tax agent, and it takes minutes once you have an ABN.
Three groups must register regardless of turnover: taxi, limousine and rideshare drivers (from the first dollar of fares), businesses wanting to claim fuel tax credits, and certain overseas suppliers of digital products or low-value imported goods to Australian consumers. If none of those apply to you, the threshold is the only test that matters.
What GST turnover actually means
GST turnover is your gross business income excluding GST itself. Not profit. Not the amount left after platform fees. If a marketplace deducts a 20% commission before paying you, your turnover is the gross sale price, not the net deposit, and businesses on Uber Eats, Airtasker and Amazon get caught by this every year.
What you exclude: input-taxed sales (residential rent and most financial supplies), sales not connected with Australia, sales not made for payment, and any amounts that are not consideration for a supply, such as most government grants. What you include, and people find this counter-intuitive, is GST-free sales. Exports, basic food and most medical services are GST-free, meaning you charge 0% but they still count toward the $75,000. A food business selling only GST-free product still has to register at $75,000, and once registered it gets to claim input tax credits on its costs while remitting almost nothing, which is a genuinely good outcome.
The rolling test: two calculations, every month
There are two separate turnover figures and you fail the test if either one reaches $75,000. Current GST turnover is the current month plus the previous 11 months. Projected GST turnover is the current month plus the next 11 months, based on what you reasonably expect. You are required to register once your projected turnover crosses the line, which means the obligation can begin before your historical figures show anything unusual.
The one relief valve: if your current turnover is over $75,000 but you can show that your projected turnover for the next 12 months will be under it (a genuinely one-off contract, for example, or you are winding the business down), you do not have to register. You need to be able to demonstrate the basis for that expectation, so keep the reasoning in writing.
Here is how the rolling test plays out for a consultant whose financial-year totals never look alarming:
| Month | Sales that month | Rolling 12-month turnover | Position |
|---|---|---|---|
| Feb 2026 | $5,200 | $61,400 | Under |
| Mar 2026 | $6,000 | $66,900 | Under |
| Apr 2026 | $7,500 | $72,100 | Under, watch closely |
| May 2026 | $8,400 | $76,300 | Threshold crossed: register by 21 June 2026 |
| Jun 2026 | $6,900 | $80,700 | Must be charging GST |
Note that the 2025-26 financial year total for this consultant might still be under $75,000 if the first half of the year was quiet. It makes no difference. The obligation arose in May 2026 on the rolling figure, and every taxable sale from the registration date onward carries GST.
The 21 days, and what registering late costs
Once you cross, you have 21 days. Your registration takes effect from the date you crossed the threshold, not from the date you got around to lodging the form, and the ATO can backdate registration up to four years where the obligation clearly existed. That backdating is where the money is lost. If you should have been registered from 1 May and you register in November, the ATO expects 1/11th of every taxable sale made in that six-month window. Your invoices did not include GST, so it comes out of your margin, and going back to clients months later to ask for another 10% is a conversation most people would rather not have.
The partial defence is that you can also claim input tax credits on your purchases over the same backdated period, which softens the blow but rarely eliminates it, because a service business buys far less than it sells. Set a calendar reminder to run the rolling calculation on the first of every month once you pass $60,000. It takes two minutes in any accounting package.
Choosing your BAS cycle
Once registered you report and pay through a business activity statement. Your cycle is set by turnover, with one election available to small voluntary registrants:
| Cycle | Who it applies to | Due dates |
|---|---|---|
| Monthly | GST turnover of $20 million or more (or by choice) | 21st of the following month |
| Quarterly | GST turnover under $20 million (the default for small business) | 28 Oct, 28 Feb, 28 Apr, 28 Jul |
| Annually | Voluntarily registered with turnover under $75,000 | With your income tax return, or 28 Feb if no return is required |
The February quarterly date is deliberately generous because it covers the Christmas quarter. Lodging through a registered tax or BAS agent usually earns a further concession of roughly two to four weeks on most quarters, which is often reason enough to use one. If your turnover is under $10 million you can also use Simpler BAS, where you report only total sales (G1), GST on sales (1A) and GST on purchases (1B), with no export or capital-purchase breakdown. See the ATO's BAS lodgement guidance for the full detail.
Cash or accruals: pick the one that matches your cash flow
If your aggregated turnover is under $10 million you can account for GST on a cash basis, meaning you remit GST when the customer actually pays you and claim credits when you actually pay your suppliers. On the accruals (non-cash) basis you remit GST in the quarter you issue the invoice, regardless of whether it has been paid.
For any business that invoices on 30 or 60 day terms, cash basis is almost always right. Accruals accounting can put you in the position of remitting $3,000 of GST in October on an invoice the client does not pay until December. The exception is a business with large upfront capital purchases financed on credit: accruals lets you claim the input tax credit as soon as you hold the tax invoice. You can change basis, but generally only from the start of a tax period, so decide at registration rather than mid-year.
Input tax credits: what actually comes back
Registration is not purely a cost. You can claim back the GST embedded in your business purchases, which is 1/11th of the GST-inclusive price. A $3,300 laptop returns $300. A $1,980 annual software subscription returns $180. Four conditions apply: the purchase must be for your business, the supplier must have charged GST, you must hold a valid tax invoice for anything costing more than $82.50 including GST, and you must claim within four years of the due date of the BAS for the period in which the credit arose.
What you cannot claim: GST on purchases used to make input-taxed supplies, GST on anything private (or the private portion, apportioned reasonably), entertainment that is not deductible for income tax, and GST that was never charged in the first place. That last one causes real errors: bank fees, most residential rent, wages and superannuation, ASIC fees and overseas subscriptions from suppliers not registered for Australian GST are not GST-inclusive, so coding them at 10% in your ledger creates a false credit that shows up when the ATO cross-matches. Check the invoice for the words tax invoice and an ABN before you code anything.
A worked example: what registration does to your numbers
A consultant expects $90,000 of sales (GST exclusive) and $22,000 of GST-inclusive business expenses in 2026-27. She must register, because $90,000 is over the threshold. The GST maths:
- GST collected on sales: $90,000 x 10% = $9,000
- Input tax credits on expenses: $22,000 / 11 = $2,000
- Net GST remitted for the year: $9,000 - $2,000 = $7,000
- Split over four quarterly BAS: roughly $1,750 each
Crucially, GST does not touch her income tax. Her income tax is calculated on the GST-exclusive figures: $90,000 of sales less $20,000 of GST-exclusive expenses = $70,000 of taxable business income. Under the 2026-27 rates that is $26,800 at 15% ($4,020) plus $25,000 at 30% ($7,500) = $11,520, less the $1,000 small business income tax offset, plus $1,400 of Medicare levy, giving $11,920. The $9,000 of GST she collected was never her money. Model both layers with the GST calculator and the sole trader tax calculator.
Should you register voluntarily?
Below $75,000 you have a choice, and the answer depends almost entirely on who your customers are. If you sell to GST-registered businesses, adding 10% costs them nothing because they claim it straight back, while you get to recover the GST on all your costs. That is a free improvement to your margin. A B2B consultant with $50,000 of sales and $15,000 of GST-inclusive costs recovers about $1,364 a year for the price of four BAS forms.
If you sell to consumers, the calculus reverses. Your market price is what it is, so adding GST either makes you 10% more expensive than an unregistered competitor or costs you 1/11th of your revenue. On $60,000 of consumer sales that is $5,455 of lost margin against maybe $900 of recovered credits.
The clearest case for early registration is a business in a capital-heavy startup phase. Say you expect $30,000 of sales in year one but will spend $44,000 including GST on equipment and fit-out. Registered, you collect $3,000 and claim $4,000, so the ATO refunds you $1,000. Unregistered, that $4,000 is simply a cost. One caution: once registered you must stay registered for at least 12 months before cancelling, and cancelling can trigger an adjustment that claws back credits on assets you still hold.
The errors that show up in ATO reviews
In order of frequency: claiming credits on GST-free or input-taxed purchases (bank fees, basic food, residential rent, most insurance stamp duty components); claiming the full GST on an asset used partly privately instead of apportioning; treating the gross platform sale as net and under-reporting turnover; issuing invoices marked tax invoice while not registered, which is a penalty offence; forgetting that the GST on a car is capped at 1/11th of the car limit ($69,674 for 2025-26); and spending the collected GST. That last one is not technically an error, it is a cash-flow decision, and it is the reason most small businesses end up on an ATO payment plan. Open a second bank account, move 1/11th of every deposit into it on the day it lands, and the quarterly BAS stops being an event.