Small Business Tax Dictionary
GST (Goods and Services Tax) — Australia
The Goods and Services Tax (GST) is a value-added tax in Australia levied at a rate of 10% on most goods, services, and other items sold or consumed within the country.
How GST works
GST operates through a collection mechanism where businesses at each stage of the supply chain gather the tax, with the end consumer bearing the final burden.
As a registered business, you:
- Charge GST on eligible sales (called "taxable supplies") by adding 10% to your prices
- Claim GST credits (called "input tax credits") on GST you've paid on business purchases
- Remit the difference to the Australian Tax Office (ATO) — typically via a Business Activity Statement (BAS)
When do you need to register for GST?
You must register for GST if your current or projected annual turnover is $75,000 or more ($150,000 for non-profit organisations). Businesses below this threshold can choose to register voluntarily.
GST and pricing
Once registered, GST affects your pricing and invoicing. Tax invoices are required for sales of $82.50 or more (including GST). These invoices must include specific details such as your ABN and the GST amount charged.
Why GST compliance matters
Proper GST management supports financial accuracy and regulatory adherence, and plays a key role in the sustainability of your business. Mistakes in claiming credits or charging GST can result in penalties and interest.