How to register for GST: What you need to know
When you start a business in Australia, you may have to pay tax on the goods and services you sell.
We’ve put together a short guide on the step-by-step process to follow to register for Goods and Services Tax (GST).
This article is for informational purposes only and does not constitute legal, personal, or tax advice. The information contained herein is subject to change and may vary from time to time. For specific advice applicable to your business, please contact a professional.
There’s nothing quite like that feeling when you make your first sale – it’s exhilarating running your business and knowing someone likes what you do. And while naturally your focus is on selling, you must also manage your taxes correctly, so you don’t land yourself in hot water with the tax office down the line.
Goods and Services Tax is a country-wide tax you collect on behalf of the Australian government and pay directly to them. Our short guide tells you all you need to know about GST registration – how you register, when you register and what the process is.
When to register for GST
Not all businesses need to be GST-registered: there are certain conditions you must meet first.
The tax only applies to businesses which exceed certain thresholds, though in practice it’s set very low, so unless you’re operating a microbusiness, you need to think about GST registration sooner rather than later.
The conditions are:
Your business has a GST turnover of more than $75,000
Your business is a non-profit organisation with a GST turnover of more than $150,000
You intend to claim fuel tax credits (GST applies regardless of turnover)
You provide limousine or taxi travel (GST applies regardless of turnover)
Overseas retailers who have an Australian sales turnover of $75,000 or more
Failure to register when you’ve met one of the above conditions can lead to financial penalties. Keep a close eye on your monthly income if you’re getting near the threshold, and register within 21 days of exceeding it.
If you don’t register within the time required, you may have to pay tax on sales from the time you were required to register, even if you didn’t include the GST amount on those sales, meaning you could end up out of pocket.
If you meet one of the conditions above, you’re legally obliged to register for GST with the ATO. You can still register if you’re below the threshold, but it’s not a legal requirement.
Certain items are considered GST-free, meaning you don’t add the usual 10% to the price and your customers won’t have to pay it. The main exempt items include:
Most basic food
Some education materials or courses
Some medical and healthcare services
Some childcare services
Some menstrual products
You can find a comprehensive list of all exemptions here.
How to register for GST
Follow these steps to complete your GST registration:
Before you register for GST you need to have an Australian Business Number (ABN). Apply for this through the Australian Business Register. If you already have an ABN skip to step two.
Once you have your ABN you can register for GST
There are several ways you can register:
Through the ATO online service
By phone on 13 28 66
Through a registered tax agent or your BAS agent
Using an Add New Business Account Form (N2954). Order it here
Registration takes a few minutes and you only need to do it once, even if you have more than one business.
You’ll receive written confirmation from the ATO containing the date your registration is effective as well as your ABN number if you haven’t already received this.
Now you’re registered you must also do the following:
Add GST to all your prices
Provide customers with tax invoices
Pay any GST you owe
Submit Business Activity Statements to the ATO
Keep receipts and invoices to claim GST credits
Use business accounting software to keep track of your credits and liabilities (optional but makes accounting easier)
Business activity statements
When you register for GST and an ABN, you automatically receive a Business Activity Statement (BAS) which tells you when it’s time to lodge your tax return. Your tax return details how much the business earned, how much tax was collected and how much you paid on goods and services used for your business. Depending on the size and nature of your business you’ll pay monthly, quarterly or annually.
You should keep your GST separate from your main accounts, making it easier when it’s time to pay your BAS.
Claiming GST Credits
You can claim back tax you paid on business expenses, also called credits.
For purchases of more than $82.50, to claim a credit you must:
Have a valid tax invoice for your business purchase
For purchases of $82.50 or less, you must:
Be a GST-registered business
Keep receipts, dockets and invoices to support your claims
While it’s important to be registered, it shouldn’t be complicated or stress-inducing. Getting it done as soon as you reach the threshold is essential not only to make sure you stay compliant, but also so you can manage your cash flow and meet all your obligations.
Useful resources to help you with registration and beyond
Square’s community blog gives you more advice on GST here
Find out more about what a tax invoice should include, plus reporting GST collected via electronic payments through Square here
Learn how to add and manage tax with your Square dashboard
Find out if you have to pay any goods and services tax on imported goods. In general, if you run a service-based business supplying businesses or individuals outside of Australia and that service will be used outside of Australia, then it’s GST-free
Information at any stage.
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