GST is a 10% tax on most goods and services. You must register for GST once your business turnover reaches $75,000 a year (or straight away if you drive a taxi or rideshare). Once registered, you add 10% GST to your sales, claim back the GST on your business purchases, and report it all to the ATO on a Business Activity Statement, or BAS. Here is how it works in plain English.
When do I have to register for GST?
You must register once your annual turnover hits $75,000 (or $150,000 for non-profits), and you can register voluntarily below that. Some businesses, like taxi and rideshare drivers, must register regardless of turnover. Register within 21 days of reaching the threshold, because you are liable for GST on sales from the date you were required to register, even if you had not yet done so.
How GST actually works
It is simpler than it sounds. You collect 10% GST on your taxable sales (GST you owe the ATO), and you get credits for the GST included in your business purchases (GST the ATO owes you). You pay the ATO the difference, or get a refund if your credits are higher. Note that some items are GST-free (such as most basic food, and many health and education services), so not everything attracts GST.
What is a BAS and how do I lodge it?
The BAS is the form you use to report GST, and often PAYG withholding and PAYG instalments too. Most small businesses lodge quarterly, some monthly or annually. You can lodge online through myGov or ATO online services, through accounting software, or through your tax or BAS agent. The single best thing you can do is keep your bookkeeping up to date, so each BAS is a quick, accurate job rather than a last-minute scramble.
How MS Financial Services can help
We handle GST registration, bookkeeping and BAS lodgment so it is one less thing to worry about. See our Tax & Compliance and Accounting & Bookkeeping services, or get in touch.
Frequently Asked Questions
When do I have to register for GST?
Once your annual turnover reaches 75,000(150,000 for non-profits). Taxi and rideshare drivers must register regardless of turnover. You can also register voluntarily below the threshold.
What is a BAS?
A Business Activity Statement, the form you use to report GST to the ATO, and often PAYG withholding and instalments as well. Most small businesses lodge it quarterly.
How does GST work?
You add 10% GST to taxable sales and claim credits for GST on your business purchases. You pay the ATO the difference, or receive a refund if your credits are higher.
How often do I lodge a BAS?
Most small businesses lodge quarterly, though some lodge monthly or annually depending on their turnover and ATO requirements.
What if I don’t register when I should have?
You are still liable for GST on your sales from the date you were required to register, so it is important to register promptly once you reach the threshold.