Do I Charge GST Under $75,000? The Threshold Explained

It's one of the most common questions Australian sole traders and small business owners ask: do I need to add 10% GST to my invoices? The short answer is that it comes down to a single number — your annual turnover — and the magic figure is $75,000. Get this wrong in either direction and you can either short-change yourself or land in strife with the ATO. This guide breaks down the GST registration threshold in plain English, so you know exactly what to do below it, what changes above it, and whether registering early makes sense for you.

What the $75,000 GST threshold actually means

GST (Goods and Services Tax) is a flat 10% tax applied to most goods and services sold in Australia. The Australian Taxation Office (ATO) requires you to register for GST once your annual turnover reaches $75,000 or more. Turnover here means your gross business income — your total sales — not your profit after expenses.

A few important variations on the threshold:

• $75,000 for most sole traders and businesses.
• $150,000 for non-profit organisations.
• $0 for taxi, ride-share and rideshare-style drivers — if you drive for fares, you must register for GST from your very first dollar, regardless of turnover.

The threshold is also forward-looking. You're expected to register if you reasonably expect your turnover to hit $75,000 in the current or coming 12 months — not just after you've already crossed it. If your income is climbing steadily, keep an eye on a rolling 12-month total rather than waiting for the financial year to tick over.

If you're under $75,000 and not registered

If your turnover sits below the threshold and you haven't chosen to register voluntarily, the rules are refreshingly simple:

• You do not charge GST on your invoices. Your prices are your prices — no 10% on top.
• You must not label your document a "Tax Invoice". That term is reserved for GST-registered sellers. Instead, simply call it an "Invoice".
• You can't claim GST credits on your business purchases, because you're outside the GST system.

This is a key compliance trap. Plenty of new sole traders download a generic template, see the words "Tax Invoice" at the top, and send it out without realising they're misrepresenting their GST status. If you're not registered, an ordinary invoice is what you need. For the full breakdown of what each document type must contain, see our guide on what a tax invoice is, and if you're just starting out, our walkthrough on how to invoice as a sole trader covers the essentials.

You can build a compliant non-GST invoice in seconds with the free InvoiceSonic invoice generator for Australia — it lets you toggle GST off entirely so the document is correct for your situation.

What changes when you cross $75,000

Once you register for GST (you have 21 days to do so after you're required to), a few things change:

• You add 10% GST to your taxable sales and the document becomes a genuine Tax Invoice.
• You start lodging a Business Activity Statement (BAS) — usually quarterly — to report the GST you've collected and paid.
• You can claim GST credits on the GST included in your business purchases, which can be a meaningful saving on equipment, software and supplies.

A valid tax invoice has specific requirements once you're registered: the words "Tax Invoice", your business identity and ABN, the invoice date, a description of what was sold, and either the GST amount or a statement that "Total price includes GST". For any sale over $1,000, you also need to show the buyer's identity or ABN. Our step-by-step on how to add GST to an invoice and the deeper Australian GST invoicing guide walk through the maths and layout.

Should you register voluntarily?

You're allowed to register for GST even if you're under $75,000. Whether you should depends on your circumstances.

Reasons to register early

• You can claim GST credits on business expenses — handy if you're buying a lot of stock, tools or equipment to get going.
• Your clients are mostly GST-registered businesses. They claim back the GST you charge, so the 10% doesn't really cost them anything, and your "Tax Invoice" looks established and professional.
• You're close to the threshold and want to avoid the scramble of re-pricing and re-issuing invoices mid-stream.

Reasons to hold off

• You sell mostly to consumers who can't claim GST back. Adding 10% either eats your margin or makes you 10% dearer than an unregistered competitor.
• You want less admin. Registration means lodging BAS and keeping tighter records, which is overhead you may not need yet.

There's no single right answer — it's a cash-flow and positioning decision. If you're unsure, a quick chat with a registered tax agent or accountant is money well spent.

A note on ABNs and the 47% withholding rule

GST and ABNs are separate things, but they're easy to conflate. You don't need to be GST-registered to have an ABN, and you should quote your ABN on every invoice regardless of GST status. Here's why it matters: if you invoice another business and don't show an ABN, that business is generally required to withhold 47% of the payment and send it to the ATO. So even an unregistered sole trader well under the GST threshold should always display their ABN. Our explainer on whether you need an ABN to invoice someone covers this in full.

Putting it into practice

Once you know your status, getting the invoice right is the easy part. The free InvoiceSonic invoicing software for Australia handles both cases — flick GST on once you're registered, leave it off while you're under the threshold — and you can start from a ready-made free tax invoice template for Australia or a sole trader invoice template to match your situation.

FAQs

Is the $75,000 GST threshold based on profit or total income?

It's based on turnover — your gross business income before expenses — not your profit. If your total sales reach $75,000 in any rolling 12-month period, you're required to register, even if your profit is much lower.

Can I charge GST if I'm under $75,000 and not registered?

No. You can only charge GST once you're registered. If you're not registered, you must not add GST or call your document a "Tax Invoice". You can choose to register voluntarily, after which charging GST becomes mandatory.

What happens if I go over $75,000 but don't register?

You're required to register within 21 days of meeting the threshold. If you don't, the ATO can require you to pay the GST you should have collected — even if you never charged your customers — plus possible penalties and interest. It pays to track your rolling turnover.

Do I still need an ABN if I'm not registered for GST?

Yes, and you should show it on every invoice. Without an ABN, a business customer must withhold 47% of your payment. Having an ABN is separate from and far simpler than registering for GST.