GST Registration Guide for Sole Traders & Small Businesses in Australia: Do You Really Need It?
Many new business owners and sole traders in Australia ask the same question: “Do I need to register for GST?”
This is one of the most common searches on Google for new startups and small businesses. If you get it wrong, it can lead to ATO penalties, backdated GST bills, and stress. If you get it right, you can run your business with confidence.
This simple guide explains everything you need to know in easy English, based only on actual ATO rules, no guesses, and no myths. This article is written for sole traders and small businesses across Adelaide, Melbourne, Sydney, Perth, Brisbane, Canberra, Darwin, and Tasmania.
1. What Is GST in Australia? (Simple Explanation)
GST stands for Goods and Services Tax. It is a 10% tax added to most goods and services sold in Australia.
Example:
If you charge a customer $100 for a service, GST makes it $110. The ATO introduced GST in 2000, and today it remains a major part of Australia’s tax system.
2. Who Needs to Register for GST? (ATO Rules)
According to the Australian Taxation Office (ATO), you must register for GST if:
- Your business turnover is $75,000 or more per year. : This is the main rule. Turnover means gross income, not profit. If you expect your income to reach $75,000 in the next 12 months, you must register within 21 days.
- You drive an Uber, Ola, or rideshare vehicle.: All rideshare drivers must register for GST from day one, even if they earn under $75,000.
- You operate a taxi business: Taxis must register no matter how much they earn.
- You want to claim GST credits:. Some sole traders choose to register early to claim credits on:
– tools
– fuel
– equipment
– business purchases
3. Examples to Understand the $75,000 GST Rule
Example 1: Sole trader hairdresser
Earns $65,000 this year → No GST needed
Plans to earn $80,000 next year → Must register within 21 days
Example 2: Online store
Income this year: $50,000
A big new order will push income to $90,000 → Must register now
Example 3: Uber driver earning $20,000
Must register from Day 1
Must lodge BAS every quarter
4. What Happens If You Don’t Register for GST When You Should?
If the ATO finds you should have been registered, they can legally:
- Backdate your GST registration.
This means you must pay GST from the date you passed $75,000 turnover.
- Charge penalties (Failure to Register Penalty).
ATO penalty units apply:
1 penalty unit = $330 (2024–25 rate).
Small businesses: 1 penalty unit every 28 days you delay.
Maximum: 5 penalty units.
Source: ATO — Penalty Unit Rates
- Charge General Interest Charge (GIC).
The ATO charges daily interest on unpaid GST. For July–September 2024, the rate was 11.34% per year.
Source: ATO — GIC Rates Table
- Hold your tax refunds.
ATO can freeze refunds until you fix GST lodgements.
5. What Are the Benefits of GST Registration?
- You can claim GST credits.: If you buy tools for $1,100, the GST is $100. You can get this back.
- It looks professional to clients: .Many bigger companies prefer working with GST-registered businesses.
- It helps organize your bookkeeping: Once registered, you must lodge a BAS. This helps keep your accounts clean.
6. What Are the Downsides of GST Registration?
You must charge an extra 10%.
- Some customers may not like this.
You must lodge BAS.
- This is done:
- – Monthly
- – Quarterly (most common)
- – Annually (small businesses with special approval)
More bookkeeping.
- You must track GST on:
- – sales
- – purchases
- – invoices
This is why many small businesses hire a registered BAS agent.
7. How to Register for GST (ATO-Approved Methods)
There are 3 ways to register:
1.Through a Registered Tax Agent.
- This is the fastest and safest option. Your agent handles:
- – ABN
- – GST
- – PAYG
- – BAS setup
AMA Accountants can register GST for clients in all 8 major cities.
2.Through the ATO Online Portal.
- You need:
- – myGov
- – ABN
- – TFN
This is slower if you don’t understand the questions.
3.By phone (for some business types).
- ATO phone support is limited and often slow.
8. GST Rules for Sole Traders Specifically
Many sole traders want simple answers. Here are clear ATO-based rules:
You MUST register if:
– your turnover is $75,000+
– you drive for Uber or a taxi
– you expect your income to reach $75,000 soon
You DO NOT need to register if:
– your income is below $75,000
– you do not drive for rideshare
– your business is not forced by law to register
Most sole traders earn below $75,000. ATO data shows more than half of sole traders earn under $50,000 (ATO Sole Trader Statistics 2023).
8. GST Rules for Sole Traders Specifically
Many sole traders want simple answers. Here are clear ATO-based rules:
You MUST register if:
– your turnover is $75,000+
– you drive for Uber or a taxi
– you expect your income to reach $75,000 soon
You DO NOT need to register if:
– your income is below $75,000
– you do not drive for rideshare
– your business is not forced by law to register
Most sole traders earn below $75,000. ATO data shows more than half of sole traders earn under $50,000 (ATO Sole Trader Statistics 2023).
9. GST for Small Businesses in Major Cities
GST Registration Adelaide
—Many Adelaide tradespeople cross the $75,000 line by their second year.
GST Registration Sydney
—Sydney has the highest number of GST-registered small businesses in Australia.
GST Registration Melbourne
—A large number of contractors and gig workers often miss the GST rule.
GST Registration Perth
—Mining support businesses often cross $75,000 quickly.
GST Registration Brisbane
—New cafés and tradies are common GST registrants.
GST Registration Canberra
—Government contractors must register early.
GST Registration Tasmania
—Tourism operators often become GST-registered during peak seasons.
GST Registration Darwin
—Seasonal income can push small operators over the threshold suddenly.
10. Do You Need to Lodge a BAS if You Register for GST?
Yes. Once you register, you must lodge BAS regularly. ATO states: “If you register for GST, you must lodge a BAS even if you have no sales.” (Source: ATO BAS Lodgement Requirements)
11. Can You Cancel GST Registration Later?
Yes, if your turnover drops below $75,000 and you do not want to stay registered. However, ATO must approve it.
FAQ – GST Registration
Do I have to register for GST at $75,000?
Ans: Yes. It is the ATO threshold.
What happens if I don’t register on time?
Ans: You may get penalties and backdated GST bills.
How long does GST registration take?
Ans: Usually 1–2 days through an agent.
Can sole traders register for GST?
Ans: Yes. Many do.
Do I charge GST to overseas customers?
Ans: Most exports are GST-free.
What is the GST rate in Australia?
Ans: 10%.
Does GST apply to all businesses?
Ans: Only if turnover is $75,000 or more (unless rideshare or taxi).
Should You Register for GST?
If your business is growing, making good income, or close to the $75,000 limit, the safest choice is to get advice from a registered tax agent. GST mistakes are one of the most common reasons small businesses get ATO penalties. Getting set up correctly saves time, money, and stress. AMA Accountants helps businesses across Adelaide, Melbourne, Sydney, Perth, Brisbane, Canberra, Darwin, and Tasmania register for GST the right way.
📞 Phone: +61 (0)420 529 890
📧 Email: finance@amaaccountant.com.au
Authored By Amit Chugh
Partner, CPA & Registered Tax Agent
Your Trusted Accountant for Adelaide, Melbourne, Sydney, Brisbane & Across Australia
Amit Chugh is a Partner at The AMA Accountant and a highly respected CPA & Registered Tax Agent with a proven track record of delivering exceptional accounting and taxation services to individuals, businesses, and corporations across Australia.
Amit Chugh is a Partner at The AMA Accountant and a highly respected CPA & Registered Tax Agent with a proven track record of delivering exceptional accounting and taxation services to individuals, businesses, and corporations across Australia.
With over 25+ of professional experience, Amit has helped thousands of clients streamline their finances, optimise tax returns, and ensure full compliance with Australian Taxation Office (ATO) requirements. His client base spans Melbourne, Brisbane, Sydney, Tasmania, Perth, Adelaide, Darwin, Canberra, and regional hubs including Prospect, Modbury, Mawson Lakes, Woodville, Mount Gambier, Victor Harbor, Whyalla, Port Lincoln, Murray Bridge, Port Augusta, Gawler, and Port Pirie.
