Most Australian businesses must register for Goods and Services Tax when their GST turnover reaches or is expected to reach seventy five thousand dollars, while eligible non profit organisations have a one hundred and fifty thousand dollar threshold. If either the current or projected turnover test hits the relevant figure, registration is compulsory and the business has twenty one days to act. GST turnover is based on sales income rather than profit, and the calculation excludes certain supplies and the GST component itself. This guide explains the rules in plain language, shows you how to calculate both tests, offers a ready made worksheet, and answers the most common questions so you can decide whether you need to register today.
What the GST registration threshold means
The GST registration threshold sets the point at which a business must charge ten per cent GST on taxable supplies, lodge regular Business Activity Statements, and account for GST credits on purchases. For most trading entities the threshold is seventy five thousand dollars. For charities and similar bodies that qualify as non profit the figure is one hundred and fifty thousand dollars. The threshold applies uniformly across every state and territory because GST is a federal tax. The law behind the threshold is found in the A New Tax System Goods and Services Tax Act nineteen ninety nine, with day to day administration handled by the Australian Taxation Office.
There is no sliding scale. A business that tips over the threshold by one dollar is required to register, charge GST on taxable sales, and include those figures in its first BAS from the effective date. Conversely, a business that remains under the threshold may choose to register voluntarily but is not obliged to do so. Taxi, limousine and ride sourcing drivers must register regardless of turnover, a special rule that reflects the cash nature of the industry.
Explaining GST turnover
GST turnover measures the value of supplies connected with Australia other than input taxed supplies. It is not the same as profit. The concept deliberately focuses on business income so that entities with large expenses but relatively low revenue are not exempted if their sales volume is significant.
GST turnover includes taxable supplies, which attract ten per cent GST, and GST free supplies, such as most basic food and exports. It excludes input taxed supplies like residential rent, financial supplies such as loan interest, certain internal transactions with associates, sales of capital assets, amounts of GST collected itself, and some adjustments prescribed by the legislation. For a sole trader the turnover test applies to all activities that form part of the one enterprise. If a contractor sells consulting services and also sells digital courses under the same Australian Business Number, both income streams must be aggregated.
Accurate bookkeeping is critical. The business must be able to substantiate each figure with invoices, bank statements, or accounting reports for at least five years after the calculation. Online accounting packages usually display net sales and GST separately, but owners should confirm the reports exclude input taxed income and the GST component.
Current GST turnover test
The current test looks backward over a rolling twelve month window ending with the present month. Imagine standing in September and adding the turnover from October of the previous year through to September of the current year. If that total equals or exceeds the threshold, the business must register and has twenty one days from the end of September to do so.
Because the window rolls forward each month, a business can slide above and below the threshold if its income fluctuates. Once registered, though, it generally remains registered unless the ATO agrees to cancel the registration after turnover falls well below the threshold for at least twelve months and future turnover is not expected to rise.
Projected GST turnover test
The projected test looks forward from the current month. A business must consider the value of supplies it has made or is likely to make in the present month plus the next eleven months. If the reasonable estimate equals or exceeds the threshold, registration is compulsory even if actual cash receipts are still low. The key word is reasonable. Forecasts should be based on signed contracts, expected seasonal trends, industry data, or sound business planning. Wishful thinking is not enough, but neither is a wait and see attitude if strong evidence points to higher sales.
For example, a start up retailer expects thirty thousand dollars of Christmas sales confirmed by wholesale orders and customer pre sales. Adding the likely post holiday period turnover, the owner projects eighty two thousand dollars within the next year. Although only ten thousand dollars has been banked so far, the business must register immediately because the projection already passes the threshold.
What counts toward turnover
Correctly categorising income is the heart of the calculation. The following table summarises the main inclusions and exclusions.
| Category | Include in GST turnover | Explanation |
|---|---|---|
| Taxable supplies | Yes | Sales of goods and services that attract ten per cent GST or would attract GST but for the turnover test |
| GST free supplies | Yes | Sales of basic food, exports and certain education or health services despite no GST being charged |
| Input taxed supplies | No | Residential rent, many financial supplies, and some fund raising transactions for non profits |
| GST itself | No | The ten per cent collected from customers is removed before calculating turnover |
| Supplies not connected with Australia | No | Offshore services consumed outside Australia are disregarded |
| Sale of capital assets | No | Disposals of business equipment and vehicles are specifically excluded |
| Certain supplies to associates | No | Internal transfers where no consideration is paid are ignored |
If an entity operates more than one branch under the same ABN, turnover is aggregated. Separate ABNs are treated individually unless the activities are grouped for GST purposes by the Commissioner, a step that targets artificial splitting of businesses.
Worked examples
Steady sole trader
Joshua is a graphic designer whose invoices average six thousand five hundred dollars each month. In December his rolling twelve month total first reaches seventy eight thousand dollars. That means the current turnover test has been met. Joshua must register by twenty one days after the end of December, so by twenty first January. From his chosen effective date, all future invoices require ten per cent GST, and he can claim credits on business purchases.
Seasonal business
Snowy Slopes Ski Hire makes most sales between June and September. By the end of August the business has earned thirty two thousand dollars since June. Bookings on hand make it almost certain September earnings will hit forty thousand dollars more. Adding the current month and the next eleven months gives a projected total of seventy two thousand dollars. This still sits under the threshold so no registration is required yet. However, strong forward bookings for the next July to September season push the twelve month projection to ninety thousand dollars. The owner now has to register within twenty one days even though the quiet summer lull immediately follows.
Start up exceeding the threshold quickly
TechTap Pty Ltd launches a software as a service platform in March. Management expects rapid growth and already holds signed annual subscriptions worth eighty thousand dollars delivering over the next twelve months. The projected turnover test is satisfied on the very first day of business, so the company must register before the end of March plus twenty one days. Waiting until cash receipts reach seventy five thousand dollars would breach the law.
Non profit organisation
Helping Hands Choir is a registered charity that earns income from concerts and merchandise. Its committee forecasts one hundred and forty thousand dollars of turnover in the coming year based on venue bookings and sponsorship agreements. This sits under the one hundred and fifty thousand dollar threshold that applies to eligible non profit bodies, so registration remains optional. The committee nevertheless decides to register voluntarily to claim credits on concert production expenses, accepting the administrative workload involved.
Registration deadline and next steps
Under the GST Act an entity that becomes required to register must apply within twenty one days after the day it passes either test. The safe practice is to submit the application immediately once the threshold is reached or projected to be reached. Delay risks administrative penalties and general interest charges on unpaid GST.
After registering a business must charge GST on taxable supplies from the nominated effective date, issue tax invoices that show the GST amount, keep proper records, and lodge BAS either quarterly or monthly depending on turnover volume.
Voluntary registration below the threshold
Many micro businesses choose to register even though their turnover is well below seventy five thousand dollars. The chief benefit is the ability to claim GST credits on purchases. This can improve cash flow for enterprises that buy stock or equipment subject to GST. Voluntary registration can also enhance credibility with larger clients who expect valid tax invoices.
The downside is the ongoing requirement to file BAS, maintain GST compliant invoices, and remit GST collected. Businesses that serve mainly consumers unable to claim GST credits may need to absorb GST in their pricing or risk appearing more expensive. Once registered voluntarily, a business must normally stay registered for at least twelve months before cancellation is allowed.
How to register for GST
The easiest way to register is online through the Business Registration portal using an active Australian Business Number. Sole traders can also use their myGov account linked to the ATO. Alternatively, a registered tax agent or BAS agent can complete the task on the client’s behalf. Information required includes the ABN, trading name, contact details, business structure, expected turnover, and the date from which GST should apply.
After submission the ATO issues a confirmation notice and updates the public Australian Business Register to show the entity is GST registered. The owner should update invoice templates immediately and configure accounting software to handle GST on sales and purchases.
Simple turnover calculator
A practical way to stay on top of the threshold is a rolling worksheet. Enter actual sales for each month, exclude GST and input taxed supplies, and keep a separate column for forecast sales. Add the latest month to the running total and drop the oldest month off the list to maintain a twelve month view. The following example shows the structure.
| Month | Actual or forecast sales ex GST | Rolling twelve month total | Over threshold |
|---|---|---|---|
| Jan | 5,500 | 5,500 | No |
| Feb | 6,200 | 11,700 | No |
| Mar | 6,800 | 18,500 | No |
| Apr | 6,600 | 25,100 | No |
| May | 7,300 | 32,400 | No |
| Jun | 7,000 | 39,400 | No |
| Jul | 6,900 | 46,300 | No |
| Aug | 6,400 | 52,700 | No |
| Sep | 6,100 | 58,800 | No |
| Oct | 7,400 | 66,200 | No |
| Nov | 7,100 | 73,300 | No |
| Dec | 7,200 | 80,500 | Yes |
In this scenario the current turnover test is met in December when the rolling total first passes seventy five thousand dollars. The entity must register by twenty first January. Using this table each month keeps the business owner alert to approaching obligations and removes guesswork from compliance.
GST threshold checklist in narrative form
Regularly record monthly sales without GST. Remove income that the legislation treats as input taxed or otherwise excluded. Update the rolling twelve month total after each month ends. Prepare a forward projection for the current month plus the next eleven months whenever material new contracts or seasonal patterns arise. Compare both results to the relevant threshold of seventy five thousand dollars or one hundred and fifty thousand dollars for eligible non profits. If either figure meets or exceeds the threshold set a reminder to lodge the registration within twenty one days. On registration day switch on GST in invoicing software, update price lists if passing GST to customers, and issue compliant tax invoices from that point. Retain source documents such as invoices, cash register summaries and bank statements for at least five years. Review turnover every month even after registering because the BAS reporting cycle and payment amounts depend on total annual turnover.
Frequently asked questions
What is the GST registration threshold in Australia
The standard threshold is seventy five thousand dollars of GST turnover for most businesses. Eligible non profit bodies use one hundred and fifty thousand dollars. Once that figure is reached or expected to be reached registration is compulsory.
Is the GST threshold based on profit or turnover
The threshold is measured against GST turnover, which reflects sales revenue excluding GST itself and certain types of supplies. Profit is irrelevant to the test.
Does the GST threshold reset each financial year
No. The ATO uses rolling twelve month tests that move forward every month rather than a single financial year snapshot.
Do I need to register if I expect to exceed seventy five thousand dollars soon
Yes. If the projected GST turnover for the current month plus the next eleven months is likely to meet or pass the threshold you must register within twenty one days even if actual cash receipts remain low today.
How long do I have to register after exceeding the threshold
There is a twenty one day window from the day the business becomes required to register. Acting promptly avoids penalties and interest.
Does GST included in customer payments count toward the threshold
No. When calculating GST turnover remove the ten per cent GST that customers pay. Only the net sales value is counted.
Do sole traders have a different GST threshold
Sole traders use the same seventy five thousand dollar threshold unless they fall into a special mandatory category such as ride sourcing.
Do Uber and taxi drivers need to register regardless of turnover
Yes. Taxi, limousine and ride sourcing drivers must register for GST from the first dollar earned.
Can I register for GST below the threshold
Yes. Voluntary registration is allowed and enables the business to claim GST credits, though it also brings ongoing reporting obligations.
What happens if I fail to register on time
The ATO can impose failure to register penalties, general interest charges on unpaid GST, and may deny input tax credits for the period before registration. Voluntary disclosure and prompt rectification can reduce penalties.
Final thoughts
Monitoring GST turnover is a routine yet essential task for every Australian enterprise. By keeping a simple rolling worksheet, understanding what income counts, and applying the current and projected tests each month, you can stay ahead of the threshold and avoid surprise penalties. If in doubt about your own figures, consult a registered tax or BAS agent, and always cross check against the latest guidance on the ATO website. Timely registration, accurate invoicing, and thorough record keeping will keep your business compliant and allow you to focus on growth rather than last minute tax headaches.
