What is GST and how does it work?

Not clear on your GST commitments? Don’t stress. It’s not as tricky as you might think. Here’s what to focus on.

A small business owner filing GST

1. Do you need to register for GST

Yes, if you expect yearly taxable income to be over $1 million.

(It may also be compulsory if the reverse charge or overseas vendor schemes apply to you.)

Optional if yearly taxable income is less than $1million.

(You can’t claim GST on expenses if you don’t register.)

2. Registering for GST

You can register online with IRAS via myTax Portal.

3. Adding GST to your prices

Old price x 1.07 = GST inclusive price

4. Issuing tax invoices

You need to be able to issue tax invoices (include those words), with extra details like:

  • the seller’s name, address and GST number
  • notes showing that GST has been charged

5. Recording GST

Keep a running tally of the GST you’ve collected on sales.

Do the same for the GST you’ve paid on purchases.

You’ll use these numbers to figure out your GST bill or refund at step 6.

*You will most likely collect more than you pay.

6. Preparing a GST return

Figure out your GST bill (or refund).

$2819.74 – $1342.87 = $1476.87 (Money you owe the IRAS.)

Include this in your GST return and file it online with the IRAS via

GST tip

Think of GST as money you’re collecting for IRAS. Treat it as their money and you won’t get caught short.

7. GST due dates

Most businesses file quarterly. You can check the due dates on the IRAS website.

Make GST less taxing

Learn how software can help with GST invoicing, accounting, and filing.

Get this infographic and bonus ebook

Download our 'GST cheat sheet' infographic, and get a bonus ebook about GST.

Start using Xero for free

Access Xero features for 30 days, then decide which plan best suits your business.