When to register for GST

Matt Byrne

Matt Byrne



One of the key questions that pops up for any new business owner is: ‘when do I have to register for GST?’ which is shortly followed by ‘should I register for GST now?’. 

If you jump on any business Facebook group or online forum and ask that question you’ll get a bunch of people tell you that you don’t need to register until your turnover gets to $75k. While there is one thing right about that, it’s not technically correct so we wanted to shed some light for those asking the question. 

When do you have to register

You only need to register for GST when you meet the threshold.  Up until that point in time, you aren’t required to register but you can voluntarily register (we’ll discuss voluntary registration below).

You are required to register for GST when your GST turnover is $75,000 or more.  Now here’s where it can get a bit tricky.  You need to assess your GST turnover on a monthly basis and you’ll exceed the thresholds if either:

    • Your turnover for the current month plus the previous 11 months totals $75,000 or more; or
    • Your turnover for the current month plus your projected turnover for the next 11 months is expected to be $75,000 or more.

    It’s this second one that catches everyone out. You need to register if you expect your next 12 months to be over $75k. That’s not on a financial or calendar year basis but instead on a rolling 12-month basis.

    Let’s use an example to try clear that up.  Steph has started a new business selling cosmetics.  Business is going well and after 4 months of trading Steph’s turnover is $10,000 (excluding GST) per month and she’s expecting to keep earning at least that amount for the next year.  Steph would be required to register for GST as her GST turnover on a projected basis is $120,000 ($10,000 for the current month plus $10,000 per month for the next 11 months) which is above the $75,000 threshold.

    If you exceed the GST turnover threshold like Steph did, you’ll have 21 days to register for GST.

    An easy way to assess whether you’re going to be required to register is when your monthly revenue is $6,250 or thereabouts and you expect to continue to make that amount going forward. However, when calculating your monthly GST turnover, exclude any sales or services to overseas clients as these are generally GST-free.

    Should you voluntarily register for GST

    Even if you’re not required to register for GST, you can still voluntarily register and there are a few good reasons why you might choose to:

    Price consistency

    If you’re expecting your business to grow and exceed the threshold, you may choose to register before your required so that your prices remain consistent throughout and don’t have to change once you register. 

    Let’s say you charge $100 for a service when you’re not registered. Once you register you need to give 10% of your income to the ATO so everyone should (where possible) increase their prices by the GST. In this example, you’d be charging $110 for the same service once registered. To maintain the same price, you may choose to register when you start the business and charge $110 from the get go. 

    To get some sweet, sweet refunds

    If your services are GST-free services (i.e. medical or exports for example), you don’t need to charge GST on your sales but you can still claim GST on your eligible purchases. In this case, you may end up with a refund every quarter of the GST you’ve paid.

    You may also get refunds if your costs outway your sales. This often happens for startups who need to invest heavily in product design and development. By registering early, you can claim the GST on the startup costs and get some much needed cash back. 


    By charging GST, other businesses might perceive that you’re bigger and performing better than you are. Thinking of it a different way, a business may perceive you as being too small or inexperienced if you’re not registered for GST because they know your turnover must be below the threshold. 


    When considering whether you should voluntarily register for GST it’s also worth keeping in mind that you’re going to add some additional admin and more costs so you need to weigh that up against any of the above benefits. This is because, once you’re registered, whether you meet the threshold or register voluntarily, you need to start collecting GST on sales and you may be able to claim GST on purchases and you need to report this to the ATO through an Activity Statement every quarter.

    In Summary

    To understand when you need to register for GST you’ll need to keep track of your monthly revenue and once you hit that threshold, you’re on. 

    If you’re not yet at that stage where you need to register, it’s still worth considering whether there are any merits for your business in voluntarily registering for GST. 

    Final Thoughts

    Still not sure if you should register for GST? No worries, reach out to the team at Day One Advisory and we’ll be able to point you in the right direction. 

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