GST or Goods and Services Tax is basically a tax charged for all the goods and services sold and consumed in Australia. Generally, it’s a 10% tax on all goods and services but it can vary on some rare situations. For business owners, you need to add this tax to the price of your products or services in order to pay the GST. Simply put, the consumers pay for this tax and it is your job as a business owner to earn and pay it to the ATO on time.
If you’re confused whether you need to register for GST or not, you’re not alone. Plenty of sole traders and even freelancers in Australia are actually confused on how and when to register for GST as well. Read along to learn who needs to register for the GST and if you’re qualified.
Who Needs to Register for GST?
Freelancers and sole traders are encouraged to register for the GST. However, there are several factors that would determine if you’re required to register or not.
- Meets the income threshold – One of the determinants if you need to register is if you’re meeting the income threshold of $75,000. If one of your businesses is earning $75,000 or more without taxes and deductions yet, then you are required to register and start charging GST to your customers. However, if you have multiple businesses or jobs but each of them doesn’t reach the threshold of $75,000 then you’re not required to register for GST.
- Transport businesses – Another factor that would make you eligible to register for GST is if you have a transport business or if you’re a driver for transportation companies. Even if you don’t meet the $75,000 threshold, you are required to register to GST if you have this kind of work or business. Aside from the GST, you also need to submit BAS quarterly and have an ABN.
If you don’t meet the requirements above, then you are not required to register for GST at all. However, you can still register your business if you want. There are several reasons why people voluntarily register their business for GST.
- You won’t surprise clients later on – Your clients will surely feel surprised when you suddenly increase the prices for your goods and services due to the additional GST later on. If you register early on, there will be no sudden price hike for your products.
- Better business perception – Even if your business is still in development phase, you can register for GST if you want. This makes your business look better to others, earning you more customers because they will start to value your business more. It will look like your business is in the market for a long time even though you’re still starting up.
Registering for GST is actually stress-free and convenient. There are numerous ways to choose from if you want to register your business. Just choose the best one that suits your preference and register in no time.