Understanding Australia’s GST Registration Threshold for Small Business
Essential information and practical guidance for managing GST registration, pricing, and cash flow with confidence Get tailored GST registration and pricing strategy advice
Content reviewed and verified by Graham Chee, with 25+ years in accounting, taxation, investment management, governance, risk & compliance. Last reviewed January 2026. Next review scheduled for April 2026.
Introduction
Why this matters for your business
If you operate a small business in Australia, understanding when you must register for GST, how the $75,000 threshold works, and the cash flow implications can save headaches and protect margins. This guide explains the GST registration rules, how to monitor your turnover accurately, the effect on pricing and BAS lodgements, and how to model cash flow using AI-driven discounted cash flow and working capital insights so you can plan growth with confidence. SME financial reporting and cash flow fundamentals
Key Considerations
Essential points to understand
The threshold: You must register for GST when your GST turnover reaches or is likely to reach $75,000 in a 12‑month period ($150,000 for non-profits). Drivers providing taxi or ride-sourcing services must register regardless of turnover.
GST turnover definition: It includes taxable and GST‑free sales connected with Australia and excludes GST itself, input‑taxed supplies (such as residential rent and most financial supplies), sales not connected with Australia, and most sales of capital assets. Use both current and projected turnover tests.
Timing and obligation: If you cross or expect to cross the threshold, you must register within 21 days. From your registration date you charge 10% GST on taxable sales and can claim input tax credits on eligible business purchases.
BAS cycles and methods: Small businesses generally lodge BAS quarterly, with the option to lodge monthly if that suits cash flow (for example, frequent refunds). Many small businesses can choose the cash basis for GST reporting; discuss the best method with your advisor.
Pricing and margins: For B2B customers registered for GST, GST is usually neutral because they can claim credits. For B2C sales, decide whether to add GST to prices or absorb it; absorbing GST reduces margins if sticker prices stay the same.
Cash flow impact: GST collected increases bank balance but is owed to the ATO. Net GST payable roughly equals 1/11th of taxable sales minus 1/11th of creditable purchases, adjusted for timing. Set aside a reserve and forecast your BAS obligations.
Practical Application
How this works in real businesses
Monitoring turnover and registering: A startup with growing sales expects to sign several contracts that will push projected GST turnover above $75,000 in the next 12 months. The correct move is to register before the threshold is reached, not after, to avoid back‑dated GST liabilities. Keep a rolling 12‑month view of both current (last 11 months plus this month) and projected (this month plus next 11 months) turnover.
Pricing decisions by customer type: A trade services business selling to other GST‑registered businesses can price at $100 plus GST ($110 inc GST) without affecting customers’ net cost. A B2C e‑commerce store must consider price sensitivity: keeping the sticker price at $100 inc GST reduces ex‑GST revenue to $90.91 and compresses margin; increasing to $110 inc GST preserves margin but may reduce volume. Choose the strategy that maximises overall profit. BAS cycle and method selection: A retailer with steady sales often prefers quarterly BAS for admin simplicity.
A manufacturer making large capital purchases may choose monthly BAS to receive GST refunds sooner. Many small businesses benefit from cash basis reporting because GST is reported when cash is received and paid, reducing timing mismatches Talk to MyMoney Financial about GST/BAS setup and quarterly lodgements. Input tax credits and documentation: To claim credits, retain valid tax invoices for purchases of $82.50 or more (including GST). Some expenses are not creditable or are only partially creditable; check edge cases with your advisor.
AI-driven DCF and working capital planning: Use scenario modelling to test the net present value (NPV) of pricing and BAS options. Example approach: Model two pricing strategies—1) pass GST through (price $110 inc), 2) hold sticker price (price $100 inc). Estimate monthly volumes, costs, and GST flows. Forecast BAS payments as 1/11th of taxable sales minus credits, with timing based on your chosen method (cash or accrual). Apply a discount rate to assess the NPV of each scenario over 12–24 months, including sensitivity to volume changes.
This highlights the working capital needed for BAS payments and whether price changes preserve margin after GST.
Recommended Steps
A structured approach
Assess
Calculate current and projected GST turnover. Identify if you are required to register regardless of turnover (for example, taxi or ride‑sourcing). Map your sales mix (taxable, GST‑free, input‑taxed) and gather recent sales and purchasing data.
Plan
Decide when to register, choose BAS frequency (monthly or quarterly), and select cash or accrual GST accounting. Build pricing strategies for B2B and B2C customers. Prepare a working capital plan that sets aside expected BAS amounts.
Implement
Register for GST and update invoicing, POS, website pricing, contracts, and accounting systems. Ensure tax invoices include required details. Create a separate GST reserve account to hold 1/11th of taxable sales less estimated credits.
Review
Monitor turnover monthly and reassess eligibility and obligations. Run AI-driven DCF and cash flow scenarios quarterly to test pricing and BAS settings. Adjust your approach as volumes, margins, or costs change.
Common Questions
What business owners ask us
Q.When exactly must I register for GST?
Register when your current or projected GST turnover is $75,000 or more ($150,000 for non‑profits). You must do this within 21 days of meeting the threshold. Taxi and ride‑sourcing drivers must register regardless of turnover.
Q.What counts towards GST turnover?
Include taxable and GST‑free sales connected with Australia. Exclude the GST component, input‑taxed supplies (like residential rent and most financial supplies), sales not connected with Australia, and most sales of capital assets.
Q.Should I choose monthly or quarterly BAS?
Quarterly suits many small businesses for simplicity. Monthly can help if you frequently receive refunds or want tighter cash flow control. Consider your transaction volume, administrative capacity, and cash cycle.
Q.Cash or accrual method for GST?
Many small businesses can choose cash basis, reporting GST when cash is received and paid, which can ease cash flow. Accrual basis reports GST when invoices are issued or received. Select the method that best matches your cash cycle and systems.
Q.What happens if I register late?
You may owe GST on past taxable sales from the date you were required to register, potentially without having collected it from customers, plus interest and penalties. Early monitoring and prompt action help avoid this outcome.
Conclusion
Plan with confidence and protect your cash flow
Understanding the GST registration threshold and its cash flow impact helps you price correctly, meet BAS obligations, and fund growth. If you are approaching the threshold or considering changes to BAS frequency, pricing, or accounting method, speak with an advisor. We can help you build AI‑driven DCF and working capital scenarios tailored to your business so you can make informed decisions. Contact our team for practical, personalised guidance.
About the Author
Graham Chee, FCPA, GRCP, GRCA, IAIP, IRMP, ICEP, IAAP
Principal Advisor & Founder
Graham Chee is a highly qualified business advisor with over 25 years of professional experience spanning accounting, taxation, investment management, governance, risk, and compliance. As a Fellow of CPA Australia (FCPA), Graham brings deep technical expertise combined with practical business acumen. His qualifications include Governance Risk and Compliance Professional (GRCP), Governance Risk and Compliance Auditor (GRCA), Integrated Artificial Intelligence Professional (IAIP), Integrated Risk Management Professional (IRMP), Integrated Compliance and Ethics Professional (ICEP), and Integrated Audit and Assurance Professional (IAAP). Graham has advised hundreds of Australian SMEs on strategic planning, succession, business valuation, and compliance matters, helping business owners build sustainable, valuable enterprises.
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