I’ve hit $75k turnover. What happens now with GST?

If your small business is starting to take off, hitting $75k in turnover is a big milestone. More than that, it comes with a very important tax obligation: registering for Goods and Services Tax, or GST. Here’s what you need to do once you hit—or are about to hit—that threshold.

How do I know if I’ve actually hit the GST threshold?

To check whether you’ve crossed the $75k GST threshold, you first need to know what actually counts towards your GST turnover:

• Cash sales
• Invoices raised
• Barter or trade transactions
• Online sales, if you sell in Australia

On the flip side, GST excludes:

• Private money you put into the business
• GST collected from clients
• GST-free items

Once you know what counts, add up your last 12 months of turnover. If it totals $75k or more, that’s your cue to register for GST [1].

There’s also projected turnover—basically, what you expect to earn over the next 12 months. If your projected turnover is $75k or more, you also need to register in advance [1].

I’ve hit $75k turnover. Do I need to register for GST now?

Yes, if you’re already at the $75k mark, you’re legally required to register for GST within 21 days of surpassing it [1].

Similarly, if you expect to exceed the threshold within the next 12 months, you need to complete your GST registration before that actually happens. Just make sure your estimate is based on realistic business forecasts, not just past sales, because that’s what the ATO looks at.

What happens once I’m registered for GST?

Once you’re GST-registered, a few key things change:

• You start charging GST on taxable sales. This is a 10% tax on top of the price you charge your customers [2]. So, let’s say you sell a handmade mug for $100. With GST on top, the customer would now pay $110.
• You can claim GST credits on business purchases, like rent, equipment, office supplies, and software. These are called input tax credits [3].
• You start lodging business activity statements (BAS) to the ATO, either monthly, quarterly, or yearly. This reports the GST you’ve collected and the GST credits you’re claiming, as well as other tax liabilities like PAYG and FBT [4].
• You’ll probably need to adjust pricing to keep your profit margins healthy and make your invoices crystal clear. You’ve really got two choices: pass the GST on by increasing your prices, or absorb the 10% and take the hit in your margin.

What happens if I hit $75k but don’t register?

Failing to register for GST when you’re legally required to can have big consequences (read: headaches) [1]:

• The ATO can ask you to pay GST on all sales made since you exceeded the threshold, which can add up to a significant lump sum.
• You could face financial penalties and interest charges, which can accrue on the GST owed.
• Your invoices won’t stack up legally, which can cause issues for your clients.
• You’ll end up with extra admin work on your hands, as you’ll need to register retrospectively and lodge amended BAS forms.

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When the $75k threshold isn’t so straightforward

Looking at your current and projected turnover and still unsure whether or not you need to register? Here are a few scenarios where the GST rules aren’t quite so clear-cut:

FAQs

Does the $75k include GST?

No, the $75k threshold is based on your turnover excluding GST. This means only income from taxable sales counts, before adding GST.

What if I earn $75k for the first time right at EOFY?

Even if you hit the GST threshold at EOFY, you’re still required to register within 21 days. The time of the year doesn’t change ATO requirements.

Can I cancel GST registration later?

You can cancel your GST registration if your turnover drops under $75k and you don’t expect to exceed it in the next 12 months (unless you’re a taxi driver, represent a registered non-resident, or manage an entity that must stay registered) [5].

Plus, you must cancel your GST if you’re selling or closing your business, or you’re changing business structures [5]. 

What happens if I register for GST but don’t meet the threshold?

It’s perfectly fine to register for GST even if your turnover doesn’t reach $75k. Just make sure you comply with GST and BAS rules.