Who needs to register for GST?
- Australian based businesses with an annual turnover of $75,000 or more
- Taxi drivers and ride-sharing drivers no matter what their turnover is
- Not-for-profit organisations with an annual turnover of $150,000 or more
- Businesses that want to claim fuel tax credits
- International retailers with total Australian sales of $75,000 or more a year
You can get into legal difficulty if you don’t register for (and collect) GST when you should.
If your annual turnover is under the threshold, you can voluntarily register for GST. There are benefits of registering your business for GST, but there will also be extra things for you to think about so it’s good to weigh up your options first.
Benefits of registering
Once you’re GST registered, you don’t end up paying GST on business expenses. You’ll still get charged the GST-inclusive price when you make the purchase, but you can claim that money back when you file your return with the ATO.
What do I need to register?
You’ll need an Australian Business Number (ABN). However, if you’re registering as a company, then you’ll need an Australian Company Number (ACN) before applying for your ABN.
Choosing an accounting basis
During the registration process, you may be asked how you will account for GST. This decision determines when you owe GST on sales (and when you can claim GST refunds on expenses). There are three options, but they may not all be available to you.
- Cash accounting: Some small businesses are able to use cash accounting. Those businesses only owe GST on a sale once the customer has paid them.
- Accrual basis accounting: Some businesses must use accrual basis accounting. That means they owe GST on a sale as soon as they raise the invoice or when they get paid, whichever comes first.
- Simpler accounting method: Food retailers can use the simplified accounting method (SAM). Check out this ATO page to see if it’s for you.
Many businesses use cash accounting for GST, but accrual accounting for income tax. That may sound complex but good accounting software makes it easy to move between the two.
How to register for GST
It’s simple to register for GST yourself and it costs nothing.
The business portal is the main way for businesses to communicate with the ATO. It’s also where you will submit your business activity statements (BAS). You can also submit your BAS via online accounting software.
Other ways to register
Once you’re registered for GST
After GST registration you need to:
- add GST to your prices
- issue tax invoices to your customers
- keep receipts and invoices to claim back GST on business expenses
- submit business activity statements (BAS) to the ATO
- pay any GST due
Disclaimer: Xero does not provide accounting, tax, business or legal advice. This guide has been provided for information purposes only. You should consult your own professional advisors for advice directly relating to your business or before taking action in relation to any of the provided content.
Guide to GST & BAS
Making a start with GST and BAS? Don’t worry. It’s a little extra admin, but follow our guide to get on top of it.
- What is GST?
You’ve probably heard about GST – it stands for goods and services tax and is added to most prices in Australia.
- Registering for GST
Find out if your business needs to register for GST. If so, learn how to do it and find out what happens next.
- Calculating GST and issuing tax invoices
If you’re a GST-registered business you must add GST to your prices. You also need to issue GST invoices. Find out how.
- Claiming back GST (and input tax credits)
GST-registered businesses can claim back the GST they pay on business expenses. Let’s learn how to claim it.
- Working out your GST refund or payment
Working out GST is simple maths. Keeping track of all your transactions is the tricky part. Let’s learn the process.
- What is BAS and how to lodge it
GST-registered businesses declare how much they’ve collected and paid by completing a business activity statement (BAS).
- Tools and guides for your business
Now you know the ins and outs of GST and BAS, but it can be tough to manage it all. Xero’s got the resources to help.
Download the guide to GST
Get your small business tax sorted. Fill in your details to get our full GST guide as a PDF.