GST in Australia: What You Need to Charge, Claim, and Report
A practical guide to understanding GST for Australian businesses — when to register, what to charge, what you can claim back, and how to stay compliant.
GST is one of those things that seems more complicated than it actually is. Once you understand the basics, it becomes a fairly mechanical process — charge it, track it, report it. Here’s everything you need to know.
What is GST?
The Goods and Services Tax is a broad-based tax of 10% on most goods, services, and other items sold or consumed in Australia. It was introduced in 2000 and is administered by the ATO.
As a business, you’re essentially a collector. You add 10% GST to the price of what you sell, collect it from your customers, then pass it on to the ATO. But you also get to claim back any GST you’ve paid on your business purchases. The amount you remit to the ATO is the difference between what you collected and what you paid.
When do you need to register for GST?
Registration is compulsory once your business’s annual turnover reaches $75,000 (or $150,000 for not-for-profits). If you’re a taxi or rideshare driver, you must register regardless of turnover.
You can voluntarily register even if you’re under the threshold. This makes sense if your business purchases include significant GST — you’ll be able to claim those credits back. It also makes your business look more established to other businesses that might want to claim GST credits on your invoices.
What to charge GST on
Most goods and services attract GST. If you sell products, provide services, or license software, you’re likely charging GST on all of it.
However, some things are GST-free. These include most basic food items, certain health services, certain education courses, and exports. Some financial supplies are input-taxed, which is a different category again.
If your business deals primarily in standard goods and services, the answer is usually straightforward: charge 10% GST on everything.
How to calculate GST
If you’re quoting GST-inclusive prices (which is required for consumer sales), the GST component of a $110 sale is $10. The formula is: divide the GST-inclusive price by 11.
If you’re working with GST-exclusive prices (common in B2B), simply multiply by 0.1 to get the GST amount. A $100 service plus GST is $110.
What you can claim GST credits on
You can claim back GST on most legitimate business expenses. This includes office supplies and equipment, software subscriptions, professional services (accountant, lawyer), vehicle expenses for business use, marketing and advertising costs, and rent for business premises.
To claim a GST credit, you need a valid tax invoice from the supplier. For purchases under $82.50 (including GST), a simplified receipt is sufficient. For anything above that, you need a full tax invoice showing the supplier’s ABN, the date, a description of the items, the GST amount, and the total price.
Reporting GST on your BAS
Your GST obligations are reported through your Business Activity Statement. Most small businesses report quarterly, though monthly and annual options exist.
Your BAS will show total sales for the period, GST collected on those sales, total purchases, and GST paid on those purchases. The net amount is what you pay to (or receive from) the ATO.
Keeping it simple
The key to painless GST management is keeping your records current. When every transaction is categorised correctly as it happens — marked as GST-inclusive, GST-free, or input-taxed — your BAS figures are ready the moment the quarter ends.
Accounting software that connects to your bank feeds and intelligently categorises transactions makes this almost effortless. Set up the rules once, and the system does the heavy lifting from there.
GST doesn’t have to be a source of stress. With the right habits and the right tools, it’s just another part of running your business smoothly.