What is GST in Australia?
The Goods and Services Tax (GST) is a 10% value-added tax applied to most goods, services, and other items sold or consumed in Australia. It was introduced on 1 July 2000 and has remained at 10% ever since. GST is collected by businesses on behalf of the Australian Taxation Office (ATO) and reported through a Business Activity Statement (BAS).
If you run a business in Australia and your annual turnover is AUD 75,000 or more, GST registration is mandatory. Below that threshold, registration is voluntary but may be useful if you want to claim GST credits on business purchases.
Australian GST Rates (2026)
| Category | Rate | Examples |
|---|---|---|
| Standard taxable supplies | 10% | Most goods and services: consulting, retail, hospitality, professional services |
| GST-free supplies | 0% | Basic food, education, healthcare, exports, water and sewerage services |
| Input-taxed supplies | N/A | Residential rent, financial services (no GST charged, no GST credits) |
The distinction between "GST-free" and "input-taxed" matters: with GST-free supplies, you charge 0% GST but can still claim input tax credits. With input-taxed, you charge no GST and cannot claim credits.
Step-by-Step: How to Calculate GST
Step 1 — Adding GST to a GST-exclusive price
Total = Amount + GST
Example: AUD 1,000 × 0.10 = AUD 100 GST. Total = AUD 1,100
Step 2 — Removing GST from a GST-inclusive price
The ATO-approved formula for reverse GST calculation:
Pre-GST amount = Total - GST
Example: AUD 1,100 ÷ 11 = AUD 100 GST. Pre-GST = AUD 1,000
The "divide by 11" rule works because the GST is one-eleventh of the GST-inclusive total when the rate is 10%. This is the standard method used by Australian accountants and is accepted by the ATO for BAS reporting.
Real Examples
Example 1 — Consulting fee (add GST)
- Service: 20 hours × AUD 150 = AUD 3,000.00
- GST 10% = AUD 3,000 × 0.10 = AUD 300.00
- Total invoice = AUD 3,000 + AUD 300 = AUD 3,300.00
Example 2 — Retail price (remove GST)
- Retail price (GST-inclusive): AUD 550.00
- GST = AUD 550 ÷ 11 = AUD 50.00
- Pre-GST amount = AUD 550 - AUD 50 = AUD 500.00
Example 3 — Export of services (GST-free)
- Service to overseas client: AUD 2,500.00
- GST 0% (export, GST-free) = AUD 0.00
- Total = AUD 2,500.00
- Note on invoice: "GST-free export"
Australian Tax Invoice Requirements (ATO Rules)
Every Australian tax invoice MUST include:
- The words "Tax Invoice" clearly displayed
- Your business identity (name, trading name, or business name)
- Your Australian Business Number (ABN)
- The date the invoice was issued
- A brief description of items sold (quantity, description, price)
- GST amount (or a statement that the total includes GST)
- The extent to which the supply is taxable
- For invoices over AUD 1,000: the buyer's name or ABN
Do You Need to Register for GST?
Registration is mandatory if:
- Your annual GST turnover is AUD 75,000 or more
- You operate a taxi, ride-share, or limousine service (any turnover)
- Your non-profit organisation has turnover of AUD 150,000 or more
- You want to claim fuel tax credits
Registration is voluntary below these thresholds. Voluntary registration lets you claim GST credits on business purchases but obligates you to charge GST on all taxable sales.
Business Activity Statement (BAS)
Once registered, you must lodge a BAS — usually quarterly, sometimes monthly or annually depending on turnover. The BAS reports:
- G1 — Total sales (including GST)
- 1A — GST collected on sales
- 1B — GST credits on purchases
- Net GST = 1A minus 1B (payable to ATO or refundable)
Most small businesses lodge quarterly. The due dates for 2026 are 28 October, 28 February, 28 April, and 28 July. Late lodgement penalties start at AUD 313 per BAS.
Common Mistakes Australian Businesses Make
- Forgetting "Tax Invoice" — The label is legally required. Without it, your customer cannot claim GST credits.
- No ABN — If you don't quote an ABN, customers may withhold 47% (the "no ABN withholding" rate).
- Mixing GST-free and taxable — Each line item needs its GST status clearly shown.
- Wrong reverse calculation — Some businesses incorrectly divide by 10 instead of 11. Always divide a GST-inclusive total by 11.
- Missing BAS deadlines — ATO penalties accumulate quickly. Set calendar reminders.
Generate an Australian Tax Invoice in 60 Seconds
Free, ATO-compliant. AUD currency, automatic 10% GST calculation, ABN field. Download as PDF instantly.
Open the Invoice Generator →Sole Trader vs Pty Ltd Invoicing
Both must follow the same tax invoice rules, but there are practical differences:
- Sole trader — Use your own name (or registered business name). Your ABN is linked to your personal tax file number.
- Pty Ltd (company) — Use the registered company name and ACN (Australian Company Number) in addition to the ABN. Director name on invoice is not legally required but common.
- Partnership — Use the partnership name and partnership ABN. Each partner is jointly liable.
Frequently Asked Questions
What is the GST rate in Australia? +
The standard GST rate in Australia is 10%. It has been 10% since GST was introduced on 1 July 2000. Some goods and services are GST-free (0%) or input-taxed.
Do I need to register for GST in Australia? +
GST registration is mandatory if your annual turnover is AUD 75,000 or more (AUD 150,000 for non-profits). Taxi and ride-share drivers must register regardless of turnover.
How do I calculate GST on a 1000 dollar invoice? +
Multiply 1000 by 0.10 to get 100 dollars GST. The total invoice amount is 1100 dollars (1000 plus 100 GST).
How do I remove GST from a GST-inclusive price? +
Divide the GST-inclusive total by 11 to find the GST component. Example: 1100 divided by 11 equals 100 GST. Subtract this from the total to get the pre-GST amount (1000).
What must an Australian tax invoice include? +
ABN, the words "Tax Invoice", seller name and address, buyer details (for invoices over AUD 1000), invoice date, description, quantity, GST-exclusive amount, GST amount, and total.
What is BAS in Australia? +
BAS stands for Business Activity Statement. It is a quarterly (or monthly) report submitted to the ATO showing GST collected, GST paid, and net GST payable or refundable.
What is the difference between GST-free and input-taxed? +
GST-free means you charge 0% GST but can still claim input tax credits on related purchases. Input-taxed means you charge no GST and cannot claim credits (e.g., residential rent).
Do I charge GST to overseas clients? +
Generally no. Exports of goods and services to clients outside Australia are GST-free, meaning you charge 0% GST. You can still claim GST credits on related business purchases.