How to navigate and register GST for small businesses

how to register for GST

Navigating the Goods and Services Tax (GST) world can be daunting for small business owners in Australia. But don’t worry—this blog article is here to help. We’ll walk you through registering for GST, managing it, and using tools like Payroller to streamline your payroll and tax processes. Let’s dive in!

What is GST?

GST is a 10% tax on most goods and services sold in Australia. Businesses of all legal structures with an annual turnover of $75,000 or more, you must register for GST. Understanding and managing GST is crucial for keeping your business compliant and avoiding penalties.

GST business benefits

Registering for GST has several benefits:

  • You can claim credits for the GST you pay on business purchases.
  • It legitimises your business in the eyes of customers and suppliers.
  • You avoid penalties and fines from the Australian Taxation Office (ATO).

Does your business need to register for GST?

GST threshold

The GST registration threshold in Australia is $75,000. If your business has a turnover equal to or exceeding this amount, you must register for GST. This threshold is lower for non-profit organisations, which must register if their turnover is $150,000 or more.

GST-FREE Goods and Services

Certain goods and services are GST-free. These include basic food items, some education courses, and medical services. Even if you only sell GST-free goods or services, you may still benefit from registering for GST to claim credits on your business purchases.

Voluntary GST registration

Even if your business turnover is below the $75,000 threshold, you can still register for GST voluntarily. This can be advantageous if you incur significant GST on business purchases and want to claim those credits.

How to register for GST

Step 1: Get an ABN

Before you register for GST, you need an Australian Business Number (ABN). Upon starting your business, you can apply for an ABN online through the Australian Business Register website. This process is straightforward and usually takes about 15 minutes.

Step 2: Access the ATO Business Portal

Once you have your ABN, you can register for GST. The quickest method is to use the ATO Business Portal.

Step 3: Complete the online GST registration form

Fill out the GST registration form on the ATO Business Portal. Ensure you have your ABN and business details ready.

Step 4: Provide the required documentation

You may need to provide supporting documents, such as proof of identity and business activity details.

Step 5: Submit your application to the ATO

Once you’ve completed the form and gathered your documents, submit your application. You’ll receive confirmation from the ATO once your registration is processed.

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GST requirements and reporting obligations

Businesses are obligated to manage and report GST back to the ATO. Here’s a breakdown of your responsibilities as a small business:

Issue tax invoices

Tax invoices must include:

  • Your business name and ABN
  • The date of issue
  • A description of the items sold
  • The total amount, including GST
  • The GST amount or a statement saying the GST is included in the total price

Collect GST

When you sell goods or services, you add 10% to the sale price as GST. For example, if you sell a product for $100, you charge $110, with $10 being the GST.

Lodge Business Activity Statements (BAS)

Your BAS summarises your GST collections and payments. You usually lodge your BAS quarterly, but some businesses may do this monthly or annually. Here’s what you need to include:

  • GST on sales: The GST you’ve collected from customers.
  • GST on purchases: The GST you’ve paid on business purchases.
  • Total sales and purchases: Include the total amounts for the period.

Claim GST credits

You can claim a credit for the GST you pay on business purchases, reducing your overall tax liability. To do this, ensure you:

  • Keep valid tax invoices for purchases over $82.50.
  • Include these credits in your BAS.

Goods and Services tax due dates

Stay on top of lodgement and payment dates for your GST:

QuarterTime PeriodGST Lodgement Due Date
Quarter 1July to September28 October
Quarter 2October to December28 February
Quarter 3January to March28 April
Quarter 4April to June28 July
GST for small businesses

Critical takeaways about GST

  • Register for GST: Essential if your turnover is $75,000 or more.
  • Issue tax invoices: Ensure they meet ATO requirements.
  • Collect and pay GST: Charge GST on sales and claim credits on purchases.

Using Payroller to simplify payroll compliance

Managing payroll after turning your business idea into reality can be complex, but Payroller makes it easy. Here’s how:

Benefits of using Payroller

  • Automated payroll calculations: Once your base salary is listed, the payroller automatically calculates taxes, superannuation, and other tax deductions.
  • Compliance assurance: Stay payroll compliant with the latest ATO regulations.
  • Time-saving features: Spend less time on admin and more on growing your business.
  • Single Touch Payroll (STP) reporting: Simplifies STP compliance by reporting payroll information directly to the ATO.
  • Leave management: Track and manage employee leave balances effortlessly.
  • Superannuation management: Ensure superannuation payments are accurate and timely.
  • Employee self-service: Employees can access their payslips and payroll information online.

Sign up for Payroller today and see how easy managing your small business finances can be. Visit Payroller now and get started!

Frequently asked questions about GST registration

The online registration process usually takes about 15 minutes if all the required information and documents are ready.

Registering for GST is free. However, managing your GST obligations may incur costs, such as hiring an accountant or using accounting software.

Sole traders must register for GST if their annual turnover is $75,000 or

more. If you are a sole trader with a turnover below this threshold, you can still choose to register voluntarily to claim GST credits on your business purchases.

If you fail to register for GST when required, you may face penalties and interest charges from the ATO. Additionally, you won’t be able to claim GST credits on your business purchases, which could increase your overall tax burden.

To check if a supplier is registered for GST, you can:

  • Ask the supplier for their ABN and verify their GST registration status using the ABN Lookup tool on the Australian Business Register website.
  • Look for the GST amount on their tax invoices.

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