Do I need to register my business for GST?
Many business owners register their businesses for GST from day one, regardless of potential income. Others, for example, many sole traders, choose not to register for GST until it is mandatory.
However, many new businesses don’t realise they have exceeded the income threshold at which they must register. This may result in paying GST on sales to the ATO – even if it hasn’t been included in your prices. Meaning you could lose one-eleventh of your income!
When is GST Registration Compulsory?
GST registration becomes compulsory for your business when it turns over $75,000 or more. The time period for assessing the $75,000 turnover threshold is either of the following:
- Total turnover for the current month and the previous 11 months
- Total estimated turnover for the current month and next 11 months.
If your income is more than $75,000 under either of these tests, you are required to register for GST. If you’re regularly making $6,250 or more each month, it’s time to check whether you should register for GST.
It’s good practice to check your turnover every quarter, and if you are getting close to the threshold, start to check every month. If you’re not yet using online accounting software, talk to us about your options. This will make reporting and preparing for GST registration much easier.
NOTE: You must register for GST within 21 days of reaching the threshold.
Special GST Rules
- You can voluntarily register even if your turnover is less than $75,000. When you voluntarily register you also have the option to complete an annual BAS if you prefer.
- If you’re making money through a ride-sharing platform like Uber, you must register for GST immediately. All commercial driving income, regardless of turnover, is subject to GST registration.
- If you want to claim fuel tax credits, you can also register for this concession. For more information about when fuel tax credits will be available – please see https://www.ato.gov.au/Business/Fuel-schemes/Fuel-tax-credits—business/
- If your business is a not-for-profit, the registration threshold is $150,000 per financial year.
- If you’re not an Australian resident business, the rules for working out GST turnover are different, so talk to us before registering.
Are you starting out and need help?
GST registration is just one of the many decisions you need to consider when starting a new business. Contact the Kennedy Cross team about the benefits of registering GST. We can help with appropriate accounting software and advice to help you on your way to business success.