You can end up owing the ATO GST on jobs you finished months ago. Even if you never charged a cent of it. That is what happens when you register for GST too late.
The setup rules catch out good operators every year. They are spread across a handful of government websites. None of them are written for a bloke in a ute.
One thing first. We are not tax agents. Everything below is checked against the ATO and business.gov.au. The links are there so you can read the source yourself. But your business is your own. Confirm any of this with your accountant before you act on it.
Here are the answers in plain English.
Do I need to register for GST?
You must register once your GST turnover hits $75,000 or more. For a non-profit, the line sits at $150,000.
Two other situations force you to register at any turnover. The first is taxi, limousine or ride-sourcing work, including Uber and DiDi. The second is claiming fuel tax credits.
Under $75,000 and none of that applies? Then it is your choice. See the ATO guide to registering for GST for the full detail.
What counts towards the $75,000?
Turnover, not profit. This is the one that stings.
GST turnover is your business income before costs come out. Bill $80,000 of work and clear $40,000 profit, and you are still over the line.
The ATO also wants you looking forward, not just back. Your projected turnover is this month plus the next 11 months. So one big job on the books can put you over. Even if the money is months away.
How long do I have to register once I hit the threshold?
You get 21 days. The clock starts the moment you know you will go over. The money does not have to be in the bank yet.
That is why you check your numbers every month. Nobody rings you when you cross the line.
You also need an ABN before you can register. GST registration sits on top of it.
Should I register for GST before I hit $75,000?
You can, and some operators do. It lets you claim GST credits back on most business buys. Tools, a work van, gear.
But it comes with strings. Once you register you have to add GST to most of your prices. You have to lodge activity statements. And that admin does not go away in a quiet month.
Your price also goes up 10% for any customer who cannot claim it back. Homeowners, mostly. That matters if you quote against operators who are not registered.
Your accountant can run this in ten minutes. Ask them before you tick the box.
Does my business need its own TFN?
That depends on how your business is set up.
Sole traders use their own personal TFN. It covers your business and personal dealings with the ATO. There is no second number to chase.
Run a partnership, company or trust, and that entity needs its own separate business TFN. The ATO has the TFN rules by structure if you want to check yours.
What licences do I need?
There is no single list. It comes down to your trade, your state, and sometimes your council.
Use ABLIS, the government's licence finder. Answer a few questions about what you do and where you do it. It tells you what applies.
Separate to that, you must register your business name with ASIC. The only exception is trading under your exact first name and surname. Jane Ryan can trade as Jane Ryan. Jane Ryan Plumbing needs registering.
How often do I lodge a BAS?
Your GST turnover decides it.
Under $20 million: quarterly.
$20 million or more: monthly.
Voluntarily registered and under $75,000: you can report annually.
For nearly every service business reading this, that means quarterly. Four times a year, forever. Worth knowing before you register early.
What happens if I register late?
This is the expensive one.
Say you were required to register and did not. You may have to pay GST on every sale since the date you should have registered. Even if you never put GST in the price. Penalties and interest can apply on top.
Think about what that means. The job is done and the invoice is paid. The customer is long gone. Now you are writing a cheque for the GST out of money you already spent.
What do people get wrong most often?
Waiting to be told. No letter arrives at $75,000. The ATO expects you to watch your own numbers and act inside 21 days.
Quoting before deciding on GST. Work out whether your price includes GST before it goes out. Adding 10% after you have won the job is a rough phone call. If your pricing is guesswork to start with, fix that first. Here is how to set your prices without guessing.
Spending the GST you collected. You collect one-eleventh of each sale for the ATO. It was never yours. Move it to a second account the day it lands. You will never be short at BAS time.
Assuming one licence covers the lot. A trade licence is not a council permit. It is not automatic across a state border either. Check every layer before you quote work in a new area.
Keeping it all in your head. You cannot work out your turnover from a notepad and three text threads. Light Leads CRM keeps every job, quote and payment in one place. The number is there when you need it. If paper is still your system, this is what it is really costing you.
Where should I start this week?
Add up your last 12 months of income. Then add up what you expect over the next 12. If either number is near $75,000, book a call with your accountant.
If you are nowhere near it, set a monthly reminder to check. That is the whole job. Ten minutes, once a month, and the 21-day rule never catches you out.
Get the registrations sorted, then get the admin off your plate. We will look at how your business runs and show you what to fix first.
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