Quick answer
In Australia, a business must register for GST once its GST turnover reaches $75,000, and the ATO says registration is needed within 21 days of crossing it. After registering, one-eleventh of GST-inclusive sales belongs to the ATO, which lowers the revenue you keep per order and raises your break-even ROAS unless you adjust prices. Setting GST aside from every sale avoids a BAS squeeze.
Key points
- Register within 21 days of GST turnover reaching $75,000.
- After registering, one-eleventh of GST-inclusive prices goes to the ATO.
- Decide early whether to raise prices or absorb GST in your margin.
- Hold GST in a separate account so the BAS never catches you short.
- GST threshold
- $75,000 GST turnover
- Time to register
- Within 21 days of reaching it
- Quarterly BAS due
- 28 Oct · 28 Feb · 28 Apr · 28 Jul
- Credit check to enquire
- None
For a lot of young businesses, the GST threshold is the first moment the business starts to feel official. It’s a sign of real growth. It’s also a moment where margins change overnight and a new bill arrives every quarter. Planning for it a few months early makes the transition painless.
When exactly do I have to register?
According to the ATO, you must register for GST when your business’s GST turnover — broadly, gross income minus any GST — reaches $75,000. You also need to register if you’re starting a business and expect to reach $75,000 in your first year. Once you cross the threshold, you have 21 days to register.
The ATO suggests checking your turnover monthly if you’re getting close. For a growing online store, that’s good advice: a strong Black Friday or a viral product can push you over faster than expected. Missing the deadline can mean penalties and interest, plus GST owed on sales made after you should have registered.
How does GST change what I keep from each sale?
Once registered, one-eleventh of every GST-inclusive price belongs to the ATO. Here’s what that does to a single illustrative order, if you keep your price the same:
| Before GST registration | After, same price | |
|---|---|---|
| Customer pays | $99.00 | $99.00 |
| GST to the ATO | $0.00 | $9.00 |
| Revenue you keep | $99.00 | $90.00 |
| Product, shipping and fees (example) | $52.00 | $52.00 |
| Contribution per order | $47.00 | $38.00 |
| Break-even ROAS | 2.11x | 2.61x |
Illustrative only. Figures are rounded.
The same ad performance that was comfortably profitable before registration can be marginal after it. That’s why it’s worth deciding on pricing before the day you register, and rerunning your numbers in the ad-spend payback calculator with the GST box ticked.
You do gain something: once registered, you can generally claim GST credits on business purchases, which reduces the net cost of stock, software and services that include GST.
Should I raise prices, absorb it or do both?
There’s no single right answer. Consider:
- Your market. If competitors are registered and price GST-inclusive, you may already be priced as if you were.
- Your customers. Business customers who claim GST credits won’t mind a GST-inclusive price rise as much as consumers.
- Your margins. If contribution is thin, absorbing GST may push some products into a loss.
- Your product mix. Many founders raise prices on hero products and absorb GST on entry items.
If this milestone coincides with needing funding for stock or growth, see what’s possible. There’s no credit check to ask.
How do I stop GST catching me out at BAS time?
The most common GST mistake isn’t registering late; it’s spending the GST. It lands in your account with every sale, and in a growing business it’s tempting to reinvest it. Then the BAS arrives.
For quarterly lodgers, the ATO’s due dates are 28 October, 28 February, 28 April and 28 July. Protect yourself by:
- Opening a separate tax account and moving one-eleventh of GST-inclusive sales into it every time a payout lands.
- Reconciling monthly, not the week before the BAS.
- Planning around big quarters. A strong October to December quarter means a bigger February BAS.
If a BAS has already caught you short, the BAS and tax bill funding page covers your options.
Does GST registration affect how lenders see me?
Usually in a good way. Registration signals a business with meaningful turnover. Lenders reading your statements will expect to see BAS payments going out; regular, on-time payments show the business is well run. Unpaid or overdue BAS amounts don’t automatically rule out funding — ATO debt is considered case by case — but they’ll be part of the conversation.
Illustrative example: a store that planned ahead
Illustrative only. A pet accessories store forecasts it will pass $75,000 GST turnover in November. In August, the founder reviews her range: she raises prices on her three best-sellers, which have strong reviews and little direct competition, and keeps prices on smaller accessories, absorbing GST there.
She registers in November within the 21 days, sets up a separate GST account, and moves one-eleventh of each payout into it. Her first BAS, due 28 February, is paid in full from that account. Because she’d rerun her ad numbers with GST before registering, her campaigns stayed profitable through the change.
What records should I keep once I’m registered?
Registration brings a little more admin. The essentials:
- Tax invoices for sales where required, showing GST correctly.
- Supplier invoices for purchases you claim GST credits on.
- A record of platform fees, many of which include GST you may be able to claim.
- Import documents showing GST paid at the border, if you import stock.
- A monthly reconciliation between your sales platform, bank account and accounting software.
Good records make your BAS faster and more accurate, and they give a lender clean evidence of your trading when you ask for funding.
Growing past the threshold? Let’s keep it smooth
Crossing $75,000 is a milestone worth celebrating, and one worth planning around. If growth is creating a need for stock, marketing or working capital, start a quick enquiry. It won’t touch your credit file, one real person reads it rather than a roomful of lenders, and we’ll call to talk it through. Please be precise on the form about revenue and time trading so we can match you properly from the outset. The next milestone for many founders is moving from sole trader to company.
Frequently asked questions
When do I have to register for GST?
The ATO says you must register when your GST turnover reaches $75,000, or if you expect it to reach that in your first year. Once you cross the threshold, you need to register within 21 days.
What counts as GST turnover?
Broadly, your gross business income minus any GST included in it. The ATO recommends checking your turnover monthly if you're approaching the threshold, so you know when you've crossed it.
Should I raise my prices when I register for GST?
It's a business decision. If you keep prices the same, your revenue per sale falls by one-eleventh. If you raise them, you protect margin but may affect conversion. Many founders do a mix, adjusting prices on some products and absorbing GST on others.
Can I register for GST before I reach $75,000?
Yes, voluntary registration is possible. It lets you claim GST credits on business purchases but means charging GST and lodging activity statements. Whether it suits you depends on your customers and costs; your accountant can help.
How does GST affect my break-even ROAS?
Once registered, your ads platform may still report GST-inclusive revenue, but you only keep the GST-exclusive amount. Contribution per order drops, so the ROAS you need to break even rises. Rerun the numbers with the payback calculator.