What Is GST?

GST (Goods and Services Tax) is a 10% tax added to most goods and services sold in Australia. If your business earns $75,000 or more per year, you must register for GST. Once registered, you collect GST from your customers and send it to the ATO — but you can also claim back the GST you pay on your business expenses.

Do You Need to Register?

You must register for GST if your annual turnover is $75,000 or more (or $150,000 for non-profits). Even if you're under this threshold, you can choose to register voluntarily — which may benefit you if you have significant business expenses.

How GST Works in Practice

Let's say you quote a job for $1,000. If you're registered for GST:

  • You charge the client $1,100 (your $1,000 + $100 GST)
  • You collect that $100 on behalf of the ATO
  • You can also claim back the GST on things you buy for the job

At BAS time, you pay the ATO the difference between the GST you collected and the GST you paid.

What is a BAS?

A Business Activity Statement (BAS) is the form you lodge with the ATO to report and pay your GST (and sometimes PAYG withholding). Most small tradies lodge quarterly. You can do it through your myGov account, accounting software, or via your accountant.

GST-Free vs GST-Exempt Items

Not everything attracts GST. Some items are GST-free, such as basic foods and some health services. As a tradie, most of your income and expenses will have GST, but it's worth knowing the exceptions.

Tips for Staying on Top of GST

  • Set aside 10% of every invoice payment into a separate "tax account"
  • Use accounting software that calculates GST automatically
  • Never miss a BAS lodgement — penalties apply
  • Reconcile your accounts regularly, not just at BAS time