GST registration + net GST estimate.
Registration status
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Your breakdown
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The $75,000 line that changes how you invoice
Once your business turns over $75,000 a year, GST registration stops being optional. The ATO requires you to register, add 10 percent GST to your sales, lodge business activity statements, and remit the GST you collect, less the GST you paid on business purchases. Below that figure you can choose to register or stay out. This tool does two jobs at once: it tells you whether registration is mandatory based on your turnover, and it estimates the net GST you would actually hand over after claiming credits on your costs.
The threshold is turnover, not profit, which catches a lot of sole traders by surprise. A consultant billing $90,000 with high expenses still crosses the line, because it is gross income from sales that counts. Non-profit organisations get a higher $150,000 threshold, and taxi and rideshare drivers must register from the very first dollar regardless of turnover.
A $120,000 sole trader, GST in and out
Take a freelancer turning over $120,000 a year with $40,000 of GST-inclusive business purchases. They are well above the $75,000 threshold, so registration is required. The tool backs out the GST already baked into both figures using the one-eleventh rule.
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So although this business collects almost $10,909 in GST from customers, it only sends $7,273 to the ATO, because the input tax credits on its purchases offset part of the bill. The higher your deductible GST-inclusive costs, the smaller the net remittance. The chart shows the GST collected, the credits clawed back, and the net amount that actually leaves the business.
When registering early actually pays
Voluntary registration below $75,000 is an underused move that can work in your favour. If your customers are themselves GST-registered businesses, they do not care that your invoices carry GST, because they simply claim it back. Meanwhile you get to claim GST credits on your own equipment, software, and supplies, which can be worth real money in a start-up phase with heavy purchasing. The judgement flips entirely if you sell to consumers: adding 10 percent to your prices either makes you less competitive or eats into your margin, so most businesses serving the public stay unregistered until forced.
A practical warning that trips up growing sole traders: the $75,000 test is forward looking as well as backward. If you reasonably expect your turnover to exceed $75,000 in the current or coming month, you must register within 21 days, not wait until the financial year ends. Plenty of contractors get a nasty letter because they crossed the threshold mid-year and kept invoicing without GST. The ATO can require you to pay the GST you should have charged, eating one eleventh of income you already spent.
Who should run this check
This is aimed at sole traders, freelancers, and small business owners trying to work out whether they have to register and what the cash impact will be. It is a screening tool, not a substitute for bookkeeping. The net GST figure assumes all your sales are taxable and all your listed purchases carry claimable GST, which is a simplification. GST-free items like most basic food, and input-taxed supplies like residential rent and financial services, sit outside this calculation, so a business with mixed supplies should treat the estimate as a starting point.
What happens if I register late?
You may have to pay GST on sales made from the date you were required to register, even though you did not charge it, plus possible penalties and interest. In effect one eleventh of that income comes out of your own pocket because you cannot always go back and bill customers retrospectively. This is why monitoring turnover against the threshold month to month matters more than checking once a year.
How often do I lodge a BAS once registered?
Most small businesses lodge a business activity statement quarterly, though the ATO can require monthly lodgement for larger turnovers and some very small operators can elect to report annually. Quarterly is the common rhythm, with due dates roughly four weeks after each quarter ends. Setting aside the GST you collect as you go avoids a cash crunch when the BAS falls due.
Does turnover include GST when testing the threshold?
The $75,000 GST turnover test uses your gross business income excluding the GST itself, and it excludes input-taxed sales and sales not connected with Australia. For most straightforward businesses it is simply your total taxable sales. If you are close to the line, the precise definition matters, so check the ATO's GST turnover rules rather than relying on a rough sales total.