GST Registration Threshold for Sole Traders (Australia)

Quick answer

Most Australian businesses and sole traders must register for GST when GST turnover is $75,000 or more. Check both current turnover and projected turnover each month. If you become required to register, the ATO says you have 21 days to do it. The test uses turnover, not profit.

This is general information, not tax advice. Check the ATO's current GST registration guidance or speak with a registered tax or BAS agent about your effective date and unusual sales.

The Australian GST thresholds

• $75,000: standard threshold for a business or enterprise.
• $150,000: threshold for a non-profit organisation.
• From dollar one: taxi, limousine and ride-sourcing passenger travel is subject to a special registration rule regardless of turnover.

Registration can also be required if you want to claim fuel tax credits. Below the normal threshold, voluntary GST registration is generally possible, but it brings BAS and record-keeping obligations. The ATO says voluntary registrants generally need to remain registered for at least 12 months.

GST turnover is not profit

The $75,000 figure is not what remains after expenses and it is not your taxable income. GST turnover is broadly gross business income excluding GST, with specific exclusions. A sole trader billing $8,000 a month and spending $5,000 a month can still cross the GST threshold even though the profit is much lower.

Do not automatically use the sales total from one financial-year profit report. The ATO asks you to consider rolling current and projected periods, and some sales are excluded from GST turnover. Use the official calculator or advice if you have overseas, input-taxed, GST-free, capital-asset or business-closure transactions.

Current GST turnover vs projected GST turnover

The two tests look in opposite directions:

• Current GST turnover: the current month plus the previous 11 months.
• Projected GST turnover: the current month plus the next 11 months.

Review both monthly. A new business with signed work may need to register before it has actually invoiced $75,000 because its projected turnover is already at or above the threshold. Conversely, the ATO notes that a business with current turnover at the threshold may not need to register if projected turnover is below it because the business is substantially and permanently reducing in size. That is a fact-specific exception, not a reason to ignore the test.

Three worked examples

1. A growing sole trader

Mia has billed about $5,000 a month, then signs recurring work worth $4,000 a month on top of it. Her past 12 months may still be below $75,000, but the current month plus the next 11 months is now likely to exceed the threshold. She checks the projected-turnover test and registers within the required period.

2. One large project

Aaron normally bills $45,000 a year and wins a $40,000 contract. The fact that it is one project does not make it invisible. He reviews when the supplies will be made, which sales count, and both rolling tests rather than waiting for 30 June.

3. A side business below the threshold

Priya projects $28,000 in design revenue and has no passenger-transport activity. She can remain unregistered, use a normal invoice and not charge GST. She still quotes her ABN and keeps income and expense records. See how to invoice without GST registration.

What changes after GST registration

1. Confirm the effective registration date shown in your ATO records.
2. Change new taxable-sale documents from “Invoice” to “Tax Invoice” and make sure the required fields are present.
3. Add 10% GST to GST-exclusive prices, or calculate the GST component of agreed GST-inclusive prices.
4. Update quote wording so customers can see whether prices include GST.
5. Start retaining purchase tax invoices needed to support GST credits.
6. Prepare to report GST through your BAS cycle.

Existing contracts, deposits and progress claims can make the changeover more complicated. Do not silently add 10% to a price the customer already accepted. Check the contract and get advice where the registration date falls during a project.

What if you register late?

The ATO says late registration may be backdated to the date you became required to register. That can leave you responsible for GST on sales from that date even if you did not add GST to the customer's price, plus possible penalties and interest. If you think you crossed earlier, establish the date and contact the ATO or your adviser rather than choosing a convenient date on the next invoice.

Make the invoice change once

Free Invoice App stores your GST status in the business profile and applies it to new invoices, with ABN, GST lines and tax-invoice wording handled consistently. Use the free Australian invoice generator to see a GST or non-GST example, then read how to add GST to an invoice and prepare for BAS.

Frequently asked questions

What is the GST threshold for a sole trader?

The standard threshold is $75,000 of GST turnover. Non-profits use $150,000, and passenger taxi, limousine and ride-sourcing services have special registration rules.

Is the threshold based on profit or income?

It is based on GST turnover, broadly gross business income excluding GST and certain excluded sales, not profit after expenses.

How long do I have to register?

The ATO says 21 days from when you become required to register.

Can I register early?

Yes, voluntary registration is generally possible. Weigh potential GST credits against BAS work, pricing and the obligation to charge GST on taxable sales.

When do I start charging GST?

From your effective registration date on taxable sales. Confirm how to treat existing quotes, deposits or progress claims if the date falls mid-project.