Do I Need to Register for GST as a Sole Trader in Australia?
By Dan Reeve — Working handyman and founder of SMASH Invoices. Built SMASH after losing $1,200 in uninvoiced jobs in a single year. He still takes on handyman work and uses SMASH on every job. About Dan →
You must register for GST as an Australian sole trader if your GST turnover reaches $75,000 per year. Turnover is calculated on a rolling 12-month basis, not just the financial year. If you reach the threshold, you must register within 21 days. Below $75,000, registration is optional. Once registered, you charge 10% GST on all taxable sales and can claim back GST paid on business purchases.
How to calculate if you've hit the threshold
The $75,000 threshold is based on your current GST turnover, the total value of all taxable sales you've made or are likely to make in a 12-month period.
It's a rolling calculation, not just a financial year number. If you earned $60,000 in the financial year but earned $40,000 in the last four months, you may be on a trajectory that crosses $75,000 in the next 12 months, and you may need to register.
The ATO's rule: if your current or projected GST turnover for the next 12 months is $75,000 or more, register immediately.
Turnover includes: All taxable sales, including jobs paid in cash. It does not include input-taxed sales (like some financial services) or GST-free sales.
Turnover does NOT include: The GST component of sales (if you're already collecting it).
What registration actually means day-to-day
Once you're registered for GST, three things change:
1. You add 10% to all invoices Every taxable sale gets 10% GST added. If you charged $300 for a job, you now charge $330, and the extra $30 goes to the ATO, not your pocket. Either build GST into your pricing upfront, or communicate the price change to regular customers.
2. You lodge BAS quarterly Business Activity Statements are due roughly one month after each quarter ends. Your BAS reports:
- GST you collected on sales (pay this to ATO)
- GST you paid on business purchases (claim this back)
- Net = what you pay or get refunded
3. Your invoices must be labelled "Tax Invoice" The two words must appear on every invoice. Non-GST-registered businesses cannot use this label.
The hidden benefit of GST registration
Many sole traders below $75,000 register voluntarily, because registration lets you claim back the GST on everything you buy for the business.
Your tools: 10% back. Your Bunnings run: 10% back. Your van fuel: 10% back. Your phone and equipment: 10% back. Phone plan, app subscriptions, protective gear, all claimable.
If you're spending $20,000 a year on business purchases, voluntary GST registration is worth $1,818 in annual input tax credits even before considering the turnover implications.
What SMASH Invoices does with GST
SMASH Invoices calculates GST automatically based on your registration status in your profile. If you're registered, every invoice shows the GST amount as a separate line. If you're not, the invoice is formatted as a standard non-GST invoice. You don't calculate anything, it's done in the background every time.
Frequently asked questions
What happens if I don't register for GST when I should have? If you reach $75,000 turnover and fail to register, the ATO can backdate your registration and require you to pay GST on sales going back to the date you should have registered, even if you didn't collect it from customers. This can result in a significant tax debt. Register promptly when you reach the threshold.
Do I charge GST on labour and materials separately? If you're GST-registered, GST applies to the full invoice including both labour and materials. You don't separate GST treatment by item type, everything you supply as part of a taxable trade service attracts 10% GST unless specifically GST-free (rare in trade services).
Can I register for GST before I reach $75,000 turnover? Yes. Voluntary registration is available to any ABN holder regardless of turnover. This is worth considering if you make significant business purchases and want to claim input tax credits. The tradeoff is the additional BAS lodgement obligation each quarter.
How do I register for GST in Australia? Register through the ATO's Business Portal, by calling 13 28 66, or through your registered tax agent. Registration is free and typically processed within 28 days. You'll need your ABN, business details, and expected turnover information.
Does SMASH Invoices handle GST calculation automatically? Yes. SMASH Invoices calculates and displays GST on all invoices based on your registration status. If you're GST-registered, every voice-generated invoice shows the GST amount as a separate line and labels the document "Tax Invoice." No manual calculation required.
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Internal links: What must be on a tax invoice in Australia? · The EOFY invoicing checklist