GST
A 10% tax on most goods and services, collected by registered businesses and remitted to the ATO.
GST adds 10% to the price of most goods and services. Registered businesses collect it on sales and claim credits for the GST paid on their own purchases, remitting only the difference.
Registration is compulsory once annual turnover reaches $75,000, or $150,000 for non-profits. Ride-share and taxi drivers must register from the first dollar regardless of turnover.
Some supplies are GST-free, including most basic food, medical services and education. Others are input taxed, such as residential rent and most financial services, meaning no GST is charged and no credits can be claimed.
How a BAS nets out
You collect $8,000 of GST on sales and pay $3,000 on purchases. You remit the $5,000 difference to the ATO rather than the full amount collected.
The bit people get wrong
GST you collect is never your money. Businesses that spend it as working capital face a bill they cannot pay when the BAS falls due — one of the most common causes of small business failure.
Common questions
When must I register for GST?
Once turnover reaches $75,000 in a twelve-month period, or if you expect it to. Registration is optional below that threshold.
Should I register voluntarily?
It can help if your customers are GST-registered businesses and you have significant input costs. It hurts if you sell to consumers, since it effectively raises your prices by 10%.
Is residential rent subject to GST?
No. Residential rent is input taxed, so no GST is charged and landlords cannot claim credits on related expenses.
Related terms
Source: Australian Taxation Office