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Do sole traders need to pay GST

Sole traders in Australia are required to register for and pay Goods and Services Tax (GST) on their taxable supplies if they have annual business turnover of $75,000 or more. This means that they need to add 10% GST to their prices and remit that amount to the Australian Taxation Office (ATO) for each sale. 

Sole Traders can also claim GST credits for the GST included in the price of the goods and services they purchase for their business.  

However, if their turnover is less than $75,000, registering for GST is optional.  However, these sole traders can register voluntarily to be able to claim GST credits on their purchases.

Sole traders below the GST threshold 

In some situations, a sole trader in Australia may register for GST but then doesn’t make $75,000 or more in annual turnover.  These sole traders must continue charging GST on their taxable supplies until they cancel their GST registration with the ATO..

The ATO may also cancel a Sole Trader’s GST registration if they find that the Sole Trader is no longer carrying on an enterprise or if they fail to meet their GST obligations.

It’s important for Sole Traders to keep accurate records of their income and expenses for GST reporting and for claiming GST credits.   

On top of GST reporting, sole traders may need to comply with other reporting obligations around employees, having an ABN and doing payroll for sole traders.  

Compliance for sole traders for GST and more

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