GST threshold: when you must register for GST in Australia, with a worked example

Short answer: in Australia you must register for GST once your GST turnover is $75,000 or more ($150,000 for a non-profit). GST turnover is your business sales, not your profit, and there are two tests: current GST turnover (this month plus the previous 11) and projected GST turnover (this month plus the next 11). If either one reaches $75,000, you have 21 days to register. Taxi, limousine and ride-sourcing drivers (Uber, DiDi and the like) must register from their first dollar. Below the threshold, registering is optional. The projected test is the one people miss: in the worked example below, a designer’s sales over the past 12 months were still under $75,000 when a new retainer had already put her expected next 12 months at $84,000, so she was required to register three months before her past sales crossed the line. Registering late costs her $2,181.82 of GST on invoices she never charged it on.

The two tests

Test	Months it covers	Use it when
Current GST turnover	This month and the 11 months before it	Sales have been building and you want to know if you have already crossed
Projected GST turnover	This month and the 11 months after it	You have just won work, started out, or put prices up and expect more

Check both at the end of every month once your sales pass about $5,000 a month. Crossing either one starts the 21 days. You do not wait for the cash to arrive: GST turnover counts the value of sales you have made (or reasonably expect to make), whether or not the customer has paid.

What counts towards the $75,000

GST turnover is your total business sales, minus:

• the GST in those sales (only relevant if you charge it already),
• input-taxed sales, such as residential rent and most financial supplies, including interest you earn,
• sales not connected with Australia,
• sales not connected with a business you run (selling your own car, for example),
• sales to associates that are not for payment and not taxable.

For the projected test, also leave out the sale of a business asset (the ute, equipment) and anything you sell only because you are closing the business or permanently shrinking it.

What it does not take off: costs. A business with $80,000 of sales and $70,000 of costs has a GST turnover of $80,000, not $10,000. If turnover and profit get mixed up, turnover vs profit covers the difference.

A worked example: a designer in Brisbane

These figures are made up. Mia is a sole trader graphic designer, not registered for GST, so her invoices have no GST on them. In June 2026 she signed a 12-month retainer with a client that, with her regular work, she reasonably expects to keep her at at least $7,000 a month from July.

Month	Sales ($)	Current GST turnover: 12 months to this month ($)
Sep 2025	4,800
Oct 2025	5,000
Nov 2025	5,500
Dec 2025	6,000
Jan 2026	4,500
Feb 2026	5,500
Mar 2026	6,000
Apr 2026	6,500
May 2026	6,500
Jun 2026	7,000
Jul 2026	7,500
Aug 2026	8,000	72,800 (Sep 2025 to Aug 2026)
Sep 2026	8,500	76,500 (Oct 2025 to Sep 2026)

• Current test: the 12 months to August 2026 come to $72,800, under the threshold. The 12 months to September come to $76,500, so on this test she crossed in September.
• Projected test: in July 2026, this month plus the next 11 (July 2026 to June 2027) at a reasonably expected $7,000 a month or more is $84,000. She crossed on this test in July, three months earlier.

Mia notices in October and registers, and the ATO backdates her registration to July. Her July to September invoices came to $7,500 + $8,000 + $8,500 = $24,000, with no GST on them. Once registered for that period, she owes GST on those sales anyway, worked out as one eleventh of the price she charged: $24,000 ÷ 11 = $2,181.82. That comes out of her own pocket unless her clients agree to pay it on top. She can claim GST credits on business purchases from July that she holds tax invoices for, which brings the bill down, but the credits are usually much smaller than the GST on sales.

Had she registered in July, she would have added 10% to each invoice from then on: a $1,000 job becomes $1,100, and she passes the $100 to the ATO. Her business clients claim that $100 back on their own BAS, so for them the price does not really change. For customers who are not registered (households, mostly) it is a 10% price rise, or a 9.1% cut in what she keeps if she holds her prices.

Late registration

• The ATO can backdate a registration to the date you were required to register, by up to 4 years (unless there is fraud or evasion).
• You owe GST on taxable sales from that date, whether or not you charged it: one eleventh of the price. Penalties and interest can be added on top.
• You can claim GST credits for business purchases from that date, if you hold valid tax invoices.

Before you contact the ATO, put the 12 monthly sales figures side by side as in the table above and note the month you crossed on each test. If the bill is more than you have, can’t pay your tax bill on time covers payment plans.

Registering when you don’t have to

Under $75,000, registering is your choice. It usually makes sense when:

• most of your customers are GST-registered businesses (they claim the GST back, so it costs them nothing),
• you are about to buy equipment or stock with a lot of GST in it, which you can then claim back,
• you will pass the threshold soon anyway and would rather start charging GST from day one.

It usually does not when your customers are mostly households and your prices are already tight, because you either raise prices by 10% or keep 10% less. Once registered you also lodge a BAS (usually quarterly) and keep tax invoices. If you register voluntarily, you are generally expected to stay registered for at least 12 months.

Checking your GST turnover in Xero

1. Go to Accounting › Reports › Profit and Loss.
2. Set the date range to the last 12 full months, and compare by month (11 periods) so you can see each month and the trend. The Total Trading Income line is a good starting figure for GST turnover. Xero Profit and Loss by month shows the setup.
3. Take out anything that does not count: interest received, and any one-off sale of a business asset if it was coded to income.
4. For the projected test, add up what you reasonably expect over the next 12 months. A profit and loss forecast or the sales growth calculator helps here.

Once you have registered, set Xero up for GST before you send the next invoice: in Financial settings, add your ABN and choose your GST accounting basis and period. Change your invoice template and repeating invoices so GST on Income is added. Check the default tax rate on your income accounts and inventory items. Most small businesses can choose the cash basis (turnover under $10 million) and report quarterly. From then on, the Xero BAS report walks through each quarter, and how much to set aside for tax covers keeping the GST in a separate account so the BAS is not a shock.

New Zealand and the UK

• New Zealand: register once sales in the past 12 months went over $60,000, or are expected to go over $60,000 in the next 12 months. You also have 21 days. Xero GST return in New Zealand covers filing.
• UK: VAT registration is required once taxable turnover goes over £90,000 in any rolling 12 months, or is expected to in the next 30 days alone. The VAT threshold calculator checks it month by month.

Common mistakes

• Only looking back. The projected test catches a big new contract or a price rise before the past 12 months show it.
• Using the financial year. Both tests are rolling 12-month windows, not July to June.
• Taking costs off. GST turnover is sales. Profit has nothing to do with it.
• Counting interest and asset sales. Interest is input-taxed, and selling equipment is left out of the projected test.
• Registering and not changing invoices. Until GST is on your invoices, you are paying it out of your own price.

Common questions

What is the GST threshold in Australia? $75,000 of GST turnover for a business, and $150,000 for a non-profit. Taxi and ride-sourcing drivers must register whatever their turnover.

Is the $75,000 GST threshold based on turnover or profit? Turnover. It is your business sales over 12 months, before costs, leaving out GST, input-taxed sales like interest, and sales not connected with your business.

Is the GST threshold for the financial year? No. It is a rolling 12 months: this month plus the 11 before it (current), or this month plus the 11 after it (projected). You check it every month, not once a year.

How long do I have to register for GST? 21 days from the day your current or projected GST turnover reaches $75,000.

What happens if I go over the GST threshold and don’t register? The ATO can backdate your registration to when you should have registered (up to 4 years) and you owe one eleventh of your taxable sales since then, plus any penalties and interest, even if you did not charge GST to your customers.

Can I register for GST if I earn under $75,000? Yes. It is optional below the threshold. It suits businesses that sell mostly to other GST-registered businesses or buy a lot of equipment, and you generally stay registered for at least 12 months.

Seeing it every Monday

ReportPilot reads your Xero figures and sends a short plain-English email every Monday: sales and profit against last month and the same month last year, cash in the bank, who owes you and bills due soon. It does not track the GST threshold or tell you when to register, but a weekly view of sales against last year shows growth while it is happening, not at tax time. It asks Xero for read-only access, and there is a 14-day free trial with no card.