Tax & Compliance

Do You Need to Register for GST?

Above the threshold, GST registration is compulsory and the clock is short. Below it, registering is a decision, and it is a better one than most people expect.

Travis Krantz CPA & Registered Tax Agent 5 September 2026 9 min read

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Key Takeaways

$75,000 is the line, and it is gross income, not profit. Reach it, or expect to reach it, and you have 21 days to register.
Below the threshold it is a choice. Registering usually pays when your customers are GST-registered businesses and you buy a lot with GST on it. It costs you when your customers are private individuals.
Registered for GST does not mean you are over $75,000. Most of my business clients are under the threshold and registered on purpose.

Two different questions get asked as one. "Do I have to register for GST?" has a rule behind it. "Should I register for GST?" does not, and that is the one worth your time, because most of the businesses I look after registered when nobody was making them.

Here is the whole thing, in the order it actually matters.

When you have no choice

You must register for GST once your business has a GST turnover of $75,000 or more, or as soon as you start a new business and expect to reach that in your first year. From the moment you are required to register, the ATO gives you 21 days to do it.

Two things trip people here.

The first is what "turnover" means. GST turnover is your gross business income, not your profit. It is what you invoiced, before you take out rent, wages, materials, fuel or anything else. A business that banks $95,000 and keeps $40,000 of it is over the threshold, not under it. I have had that conversation more than once, and it is never a good one to be having in arrears.

The second is that the test looks forwards as well as backwards. It is not only the last twelve months. If you can see that the next twelve months will get you there, that is the point at which the clock starts, not the day the money actually lands.

Register too late and you can end up owing GST out of your own pocket, on sales you already made and never charged GST on. That is the real cost of missing it, and it is why I keep an eye on the threshold for clients rather than waiting to be told.

One exception that catches people

If you provide taxi or limousine travel for passengers, and that includes ride-sourcing, you must register regardless of your GST turnover. There is no threshold to sit under. Drive one weekend a month and you are still in the same position as a full-time operator. It applies whether you own the car or lease or rent it.

Below $75,000, you do not have to

I want to say that plainly, because a lot of people assume an ABN and GST come as a pair. They do not. If your GST turnover is under the threshold and you are not driving passengers for a living, registration is optional. You can run a real business, invoice real customers and lodge a real tax return without ever touching a BAS.

So why do most of my business clients have one?

Why a business under the threshold registers anyway

You get the GST back on what you buy. This is the one that does most of the work. Once you are registered, the 10% built into your equipment, your tools, your vehicle running costs, your software, your stock and your insurance stops being a cost and starts being a credit. If you are spending real money on things with GST in them, that is a direct saving every quarter, and it is money you are currently just wearing.

If your customers are businesses, the 10% costs them nothing. A GST-registered customer claims back the GST you charge them, the same way you claim back the GST you are charged. So your price effectively does not change for them. You add 10%, they claim 10%, and you get the credits on your own costs for free. For anyone working B2B, in trades, in consulting, as a subcontractor, this is close to a one-way street.

It reads as an established business. Not a headline reason, but not nothing either. A tax invoice showing GST is what the other side's bookkeeper is expecting, and larger customers occasionally ask before they onboard a new supplier. It is a small credibility signal that costs you nothing if the arithmetic above already stacks up.

You are set up before you need to be. Crossing the threshold is a much smaller event when your accounting file already codes GST correctly, your invoices already carry it and your quarterly rhythm already exists. Doing it the other way round means discovering in April that you passed the threshold in November, and then untangling everything in between. If you are growing and $75,000 is plausibly within a year, registering early is mostly just doing the setup once instead of twice.

And the reasons not to

I am not going to pretend this only runs one way. There are two genuine costs, and for some businesses they win.

If your customers are private individuals, the 10% comes out of you or out of them. A member of the public cannot claim GST back. So for a hairdresser, a personal trainer, a dog groomer, a mobile mechanic working on family cars, registering means either putting your prices up by 10% and hoping nobody blinks, or holding your price and handing a tenth of every sale to the ATO out of your margin. That is a real hit to a real business, and no amount of credits on your purchases will usually cover it if your costs are mostly your own labour. If you sell to the public and you do not buy much with GST on it, staying unregistered while you are under the threshold is often simply the right answer.

The admin is ongoing. A BAS is not a big job, but it is a recurring one, and it has to be right. Your coding has to hold up, your file has to be reconciled, and the lodgement is not optional once you are registered. That either costs you time or costs you a fee.

There is a third thing that is not a cost so much as a discipline. The GST you collect is not your money. It sits in your bank account looking exactly like income until the BAS falls due, and businesses get into trouble by spending it. If you know you would spend it, that is worth being honest about before you sign up, not after.

One more point of practicality: registration is not a tap you turn on and off between quarters. It is a decision to make deliberately, and to stay with.

How to work out which one you are

Three questions get you most of the way.

Who pays your invoices? Businesses that are themselves registered, or members of the public. This is the single biggest input and it is usually obvious in ten seconds.
How much GST are you currently paying and not getting back? Add up the GST buried in a normal year of purchases. Equipment-heavy and vehicle-heavy businesses are often surprised. A laptop-and-a-phone business usually is not.
How close is $75,000, honestly? Not your best month annualised. Your realistic next twelve months.

Two answers pointing the same way settle it. If they conflict, that is when it is worth half an hour with someone who can put numbers on it rather than adjectives.

It is also worth knowing that not every sale carries GST. Some sales are GST-free, and if a decent share of what you sell falls into that category the arithmetic changes again. That is a checkable thing rather than a guessable one, and it is worth checking before you decide either way.

Registered does not mean big

This is the assumption I most want to dislodge, because it stops people asking the question at all.

Being registered for GST says nothing about your turnover. Most of my business clients are under $75,000 and registered voluntarily, because the credits and the customer base made it the better deal. They are not big businesses pretending to be small or small businesses pretending to be big. They just did the sum.

It does change what your year looks like, though. Once you are registered you are lodging activity statements, so the work stops being one annual return and becomes a rhythm. That is why the line I use for pricing is "do you lodge a BAS", not "what do you turn over". A sole trader who is not registered is an individual return with a business schedule attached, and the sole trader page covers what that involves. A sole trader who is registered is a business with quarterly obligations, and that sits on the ongoing side. The pricing page sets out both.

If you do have to register

Do it inside the 21 days and do it properly. You need an ABN first, you register once even if you run more than one business, and you choose a reporting cycle that suits your cash flow rather than accepting the default without thinking about it.

If you have already gone past the threshold and not registered, do not sit on it. It is fixable, registrations can be backdated, and the fix is cheaper and less painful the earlier it starts. Ignoring it just grows the amount you end up funding yourself.

Either way, the ongoing work after registration is what the BAS and GST service exists for: the coding kept right, the statements prepared and lodged, and the due dates managed so you are not the one remembering them.

If you are weighing this up right now, bring me your last twelve months of income and a rough list of what you buy. That is enough to give you an answer, a reason for it, and a date to act on.

Sources

Travis Krantz, CPA

Registered Tax Agent and founder of Summit Tax. Over a decade of experience helping small business owners take control of their finances.

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