Most people who go out on their own — a sparkie, a lawn-mowing operator, a solo cleaner — don't start a business because they love tax. They start because they're good at the work. GST is the part that gets quietly ignored until it becomes a problem: a missed registration, an invoice that isn't legal, or a BAS deadline that arrives with money you've already spent.
The good news is that GST isn't complicated once someone explains it without the jargon. That's what this guide does. We'll cover what GST actually is, the $75,000 line that decides whether you have to register, how to charge it properly, what a legal tax invoice has to show, and how BAS works through the year. The rules are identical whether you're quoting a rewire, a fortnightly mow, or an end-of-lease clean.
If you're still getting the business off the ground, our no-BS checklist for starting a trade business covers ABNs, insurance, and licences alongside the tax side.
GST — Goods and Services Tax — is a flat 10% tax on most goods and services sold in Australia. When you're registered for GST, you add 10% on top of your prices, collect it from your customers, and then pass it on to the ATO.
The single most important thing to understand: the GST you collect is not your income. It never was your money. You're acting as an unpaid tax collector for the government. If you charge a client $110 for a job ($100 plus $10 GST), that $10 belongs to the ATO from the moment it lands in your account.
This trips up more new operators than anything else. The money's in your bank, it feels like yours, and it gets spent on fuel, tools, or rent. Then BAS time arrives and you owe the ATO money you no longer have.
The flip side — GST credits:
It's not all one-way. When you're registered, you also get to claim back the GST you paid on business purchases — tools, materials, fuel, equipment, software. These are called GST credits (or input tax credits). So if you bought $1,100 of materials ($1,000 + $100 GST), you can claim that $100 back. Your BAS works out the difference between the GST you collected and the GST you paid.
Over a quarter, a cleaner collects $3,000 of GST from clients and paid $700 of GST on supplies, fuel, and a new vacuum. At BAS time she owes the ATO the difference: $3,000 − $700 = $2,300. The $700 effectively comes back to her as a credit against what she owes.
Open a separate bank account and move the GST portion of every payment into it the moment you get paid. Roughly 1/11th of every GST-inclusive payment is the ATO's. Park it, don't touch it, and BAS time becomes a non-event instead of a panic.
Here's the rule that matters most. You must register for GST once your business turnover hits $75,000 or more in any rolling 12-month period — or as soon as you reasonably expect it will. Once you cross that line (or expect to), you have 21 days to register.
Two things people get wrong about this:
It's turnover, not profit:
$75,000 is your gross income — the total you invoice, before you take out fuel, materials, tools, or anything else. A mowing operator turning over $80,000 but only keeping $45,000 after costs still has to register. It's the top-line number that counts, not what lands in your pocket.
It's a rolling 12 months, not the financial year:
This isn't measured from 1 July to 30 June. It's any 12-month window. The ATO looks at two things: your current turnover (this month plus the previous 11) and your projected turnover (this month plus the next 11). If either hits $75,000, you're in.
You don't get to wait until the end of the year to add it up. If you sign a big contract in October that you know will push you over $75,000 within 12 months, you're expected to register then — not next July. Registering late can mean you owe GST on past sales you never charged it on, out of your own pocket. Keep a rolling eye on your numbers.
What if you stay under $75,000?
Then registration is optional. Plenty of part-time operators, side-hustle mowers, and newer sole traders run perfectly legally without being registered for GST. You simply don't charge GST, and you can't claim GST credits. Your invoices don't say "Tax Invoice" — just "Invoice".
If you're growing, watch this number like a hawk. The most common GST mistake isn't getting the maths wrong — it's not noticing you've crept over $75,000 until the ATO does. A quick monthly check of your rolling 12-month total takes two minutes and saves a world of pain.
You're allowed to register for GST voluntarily even if you're under $75,000. Whether you should depends on your situation. There's no universal right answer, but here's the honest trade-off.
Reasons to register early:
- You can claim GST credits on your setup costs. If you're buying a lot of gear — a new mower, a trailer, tools, a work vehicle — registering means you claw back the 10% GST on all of it. On $20,000 of startup equipment, that's roughly $1,800 back.
- You look more established. Commercial clients, builders, and property managers often expect a tax invoice with GST on it. Being registered can make you look like a serious operator rather than a weekend hobby.
- You're about to cross $75k anyway. If you can see the threshold coming, registering early saves you scrambling later.
Reasons to hold off:
- Your prices effectively go up 10% for non-business clients. A homeowner doesn't care about your GST credits — they just see the price rise. If most of your work is residential and your competitors aren't registered, you can end up 10% more expensive for the same job.
- You take on BAS paperwork. Once registered, you're lodging activity statements (usually quarterly) for the life of the registration. It's not hard, but it's a recurring job.
- The admin only makes sense if the credits are worth it. If you're a low-cost service with few business purchases (say, a solo cleaner with minimal supplies), the credits you'd claim might not justify the extra paperwork.
Buying a lot of gear to get started and dealing mostly with business clients? Registering early often pays. Running lean, mostly residential, and well under the threshold? It's usually fine to wait until you're closer to $75,000. When in doubt, ask an accountant — this is exactly the kind of one-off question they're good at.
Once you're registered, you add 10% GST to most of what you sell. The mechanics are simple, but how you present it on a quote matters — because nothing annoys a client more than a price that grows between the quote and the invoice.
GST-inclusive vs GST-exclusive:
You can quote either way, as long as the client understands the total:
- GST-exclusive: "$100 + GST" — the client pays $110. Common for business-to-business work where the client claims the GST back anyway.
- GST-inclusive: "$110 including GST" — the all-in price is stated upfront. Better for residential clients, who just want to know the final number.
For homeowners, always quote GST-inclusive. A homeowner who's told "$300" and then gets an invoice for "$330 + GST" feels stung, even though it's legal. State the total they'll actually pay.
The 1/11th rule:
When a price already includes GST, the GST portion is exactly 1/11th of the total — not 10%. This catches people out. If you charge $110 including GST, the GST component is $110 ÷ 11 = $10. If you charge $550 including GST, the GST is $550 ÷ 11 = $50.
The 10% is added to the pre-GST price. So $100 becomes $110. To go backwards from the $110 total to the GST inside it, you divide by 11, not multiply by 10%. $110 × 10% = $11 would be wrong. $110 ÷ 11 = $10 is right. Keep this straight or your BAS figures will drift.
What you don't charge GST on:
Most trade, mowing, and cleaning work is a standard taxable supply — you charge GST on all of it. A handful of things are GST-free (certain health, education, and basic food items), but these rarely come up for service operators. If you're only ever invoicing labour and materials for jobs, assume GST applies to the lot unless your accountant tells you otherwise.
Getting GST maths right on every quote and invoice by hand is where errors creep in. VerbalIt calculates the GST component automatically and shows it correctly on every quote and tax invoice — so the number on the page is always right, whether you priced inclusive or exclusive. You speak the job; the GST sorts itself out.
If you're registered for GST and the sale is over $82.50 (including GST), you must give the client a valid tax invoice when they ask — within 28 days of the request. This isn't optional, and it isn't just paperwork: your business clients need a compliant tax invoice to claim their own GST credits. Get a field wrong and you'll get the invoice bounced back.
For sales under $1,000, a tax invoice must show:
| # | What it must include |
|---|---|
| 1 | The words “Tax Invoice”, clearly shown |
| 2 | Your business / trading name (the seller's identity) |
| 3 | Your ABN |
| 4 | The date the invoice was issued |
| 5 | A description of what was sold (and quantity, if relevant) |
| 6 | The GST amount — shown separately, or a line saying “Total price includes GST” |
| 7 | The extent to which each item is a taxable sale |
For sales of $1,000 or more, add one more:
On top of the seven above, the invoice must also show the buyer's identity or ABN. So for a bigger job — a full rewire, a commercial clean, a big landscaping job — you need the client's name or ABN on the invoice too.
A unique invoice number (sequential, so you can track them) and your payment terms and bank details. Neither is strictly required by the ATO, but both make you look professional and make getting paid easier.
Don't issue a “Tax Invoice” and don't show any GST. Your document is just an “Invoice”. Charging or showing GST when you're not registered is a real problem — you'd be collecting a tax you have no right to collect. Keep it simple: not registered means no GST, anywhere.
Digital is fine — a PDF emailed to the client is a perfectly valid tax invoice, no paper required. And keep copies: the ATO expects you to hold your invoices and records for five years.
A BAS — Business Activity Statement — is the form you lodge with the ATO to report and pay your GST (and a few other things, like PAYG if you have staff). It's how the GST you've collected actually gets to the government, and how your GST credits come back to you.
What you report:
- GST you collected on your sales over the period
- GST you paid on your business purchases (your credits)
- Total sales for the period
The ATO works out the difference. Collected more than you paid? You pay the difference. Paid more than you collected (common in a quarter where you bought big equipment)? You get a refund.
Most small operators use Simpler BAS — if your GST turnover is under $10 million (which is essentially everyone reading this), you only report total sales, GST on sales, and GST on purchases. No fiddly sub-categories.
How often you lodge:
Almost every sole trader and small operator lodges quarterly. The standard due dates are:
| Quarter | Period | BAS Due |
|---|---|---|
| Q1 | July – September | 28 October |
| Q2 | October – December | 28 February |
| Q3 | January – March | 28 April |
| Q4 | April – June | 28 July |
If you lodge through a registered BAS or tax agent, you often get extra time beyond these dates. If you're voluntarily registered and under $75,000, you may be able to lodge annually instead. Very large businesses ($20m+) lodge monthly — not something you'll need to worry about.
How to lodge:
You can lodge online through your myGov account linked to the ATO, through the ATO Business Portal, or — the easy option — through a registered BAS or tax agent who does it for you. For a busy operator, paying a BAS agent a modest fee each quarter to handle it is often money well spent.
BAS is only stressful when you haven't set the money aside or kept your records straight. If you've been parking the GST in a separate account (Step 1) and your invoices and expenses are all captured, lodging a BAS is a 20-minute job four times a year. The pain is never the form — it's the scramble to reconstruct a quarter of receipts the night before it's due.
Spending the GST you collected:
The big one. The money's in your account, it feels like yours, you spend it. Then BAS lands and you owe money you don't have. Fix: move 1/11th of every payment into a separate account the day it arrives.
Not noticing you've crossed $75,000:
Because it's a rolling 12 months, not a financial year, it's easy to creep over without realising. Register late and you may owe GST on past sales out of your own pocket. Fix: check your rolling 12-month turnover once a month.
Calculating GST as 10% of the total instead of 1/11th:
On a GST-inclusive price, the GST is 1/11th of the total, not 10%. Get this wrong on every invoice and your BAS figures drift out by a noticeable amount over a quarter.
Issuing invoices that aren't valid tax invoices:
Missing your ABN, not saying “Tax Invoice”, or leaving off the GST line means your business clients can't claim their credits — and they'll come back to you to fix it. Use a template (or a tool) that includes all seven required fields every time.
Charging GST when you're not registered:
If you're under $75,000 and not registered, you must not add GST or issue tax invoices. Doing so means collecting a tax you have no entitlement to. Just “Invoice”, no GST.
Throwing away receipts:
No receipt, no GST credit — and a records gap if you're ever reviewed. Keep everything for five years. A photo of each receipt into a folder or app on the day is enough; the shoebox-of-faded-dockets approach is how credits get lost.
Separate GST account + capture every invoice and receipt as it happens. Do those two things and five of the six mistakes above disappear. The sixth — watching the $75k line — is a two-minute monthly check.
Once your invoicing is clean and consistent, getting paid on time is the next piece of the puzzle. Our guide on chasing late payments without burning bridges covers the scripts and timing that actually work.
Keep reading
How to Start Your Trade Business in Australia — The No-BS Checklist
ABN, GST, insurance, licences, invoicing — the complete checklist for going out on your own.
Read more →How to Quote a Trade Job in Australia — A Practical Guide
What to include, how to handle GST on a quote, variations, and protecting yourself from scope creep.
Read more →How to Chase Late Payments Without Burning Bridges
Practical scripts, timelines, and strategies for getting paid on time — without ruining client relationships.
Read more →