FoderisDo I Need to Register for GST? The A$75,000 Threshold Explained
Registering for GST is one of the first tax decisions a new Australian business faces. For many small online and SaaS businesses the answer is not obvious, because sales can grow quickly and a lot of revenue may come from overseas. This guide explains when registration is compulsory, how to work out your GST turnover, and the trade-offs of registering before you have to.
In short
- You must register when your GST turnover is A$75,000 or more, or A$150,000 or more for a non-profit organisation.
- The test looks at both your current turnover (this month plus the previous 11) and your projected turnover (this month plus the next 11).
- You have 21 days to register once you reach the threshold.
- GST-free export sales count toward GST turnover. Input-taxed sales, such as bank interest, do not.
- Below the threshold, registration is optional. If you register voluntarily, you generally must stay registered for at least 12 months.
When registration is compulsory
The ATO’s Registering for GST page lists when you must register. The ones most small businesses care about are:
- your business has a GST turnover of A$75,000 or more
- you start a new business and expect your turnover to reach A$75,000 in the first year
- your non-profit organisation has a GST turnover of A$150,000 or more
- you provide taxi or limousine travel, including ride-sourcing, regardless of turnover
- you want to claim fuel tax credits.
The ATO also lists income through the sharing economy or digital platforms, such as food delivery, as a trigger. If any of these could apply to you, read the ATO page in full.
Once you are required to register, you need to do it within 21 days. You need an ABN first, and you only register once even if you run several businesses.
Current vs projected GST turnover
The threshold has two tests, and reaching either one means you must register:
| Test | What you add up | Threshold |
|---|---|---|
| Current GST turnover | This month plus the previous 11 months | A$75,000 or more |
| Projected GST turnover | This month plus the next 11 months (a reasonable estimate) | A$75,000 or more |
The projected test is the one that catches growing businesses. If you sign a large customer or your monthly recurring revenue climbs, you may need to register before your past 12 months reach A$75,000.
When projecting, the ATO says not to include the sale of a capital asset, or sales made only because you are closing or substantially shrinking the business. And even if your current turnover is over the threshold, you do not have to register if the ATO is satisfied your projected turnover will be under it.
The ATO suggests checking each month if you are not yet registered. A spreadsheet of monthly sales with a rolling 12-month total, and a simple forecast, is enough.
What counts toward GST turnover
The ATO’s section on working out your GST turnover defines it as your total business income (not profit), minus:
- GST included in sales to your customers
- sales to associates that are not for payment and are not taxable
- sales not connected with an enterprise you run
- input-taxed sales you make
- sales not connected with Australia.
Two points trip up online businesses.
GST-free export sales still count. If you are in Australia selling software to customers overseas, those sales are usually GST-free, but they are still connected with Australia. The ATO’s exports and GST page says you include export sales connected with Australia when working out GST turnover, even though they are GST-free. A SaaS with 90% overseas customers can still be over the threshold.
Input-taxed sales do not count. The most common input-taxed sales are financial supplies, such as lending money, and selling or renting residential premises. For a typical SaaS business, interest earned on the business bank account is the usual example. It is left out.
Also remember that turnover is income, not profit. A business with A$80,000 of sales and A$70,000 of costs is still over the threshold.
Worked example
A solo founder in Brisbane launches a SaaS product in January. By the end of September, the last 12 months of sales look like this:
| Source | Amount (A$) | Counts? |
|---|---|---|
| Subscriptions to Australian customers | 14,000 | Yes |
| Subscriptions to overseas customers (GST-free exports) | 48,000 | Yes |
| Interest on the business savings account | 600 | No, input taxed |
| Current GST turnover | 62,000 |
Current turnover is under A$75,000. But monthly sales are now A$7,500 and growing, so projected turnover for September plus the next 11 months is about A$90,000. The projected test is met, so the founder needs to register within 21 days.
Once registered, the founder includes GST in sales to Australian customers, keeps overseas sales GST-free, and starts claiming GST credits on Australian business purchases.
Voluntary registration for a small SaaS
If you are under the threshold, registering is optional. The ATO notes that if you choose to register, you generally must stay registered for at least 12 months. After that, you can cancel your GST registration if your turnover is below the threshold.
Reasons to register early
- GST credits. You can claim the GST on Australian business purchases, such as local software, equipment, a coworking desk or your accountant’s fees. If most of your sales are GST-free exports, you may get regular refunds.
- No scramble later. If growth is likely, registering early avoids repricing and a rushed switch when you cross the threshold.
- Business customers. Australian businesses can claim the GST you charge, so including it costs them nothing in the end.
Reasons to wait
- Consumer prices. Australian consumers cannot claim GST. You either raise your price by 10% or absorb the GST and earn less on each sale.
- Paperwork. You must lodge a business activity statement each period. Small businesses can use Simpler BAS, which needs only a few labels, but it is still a deadline.
- Few local costs. If your main costs are overseas software, you may have little GST to claim, because properly registered businesses are usually not charged GST on those.
For a SaaS selling mostly overseas with meaningful local costs, early registration often makes sense. For one selling mostly to Australian consumers with few local costs, waiting usually does. Run your own numbers.
If you miss the deadline
If you should have registered and did not, the ATO says you may have to pay GST on sales made since the date you were required to register, even if you did not include GST in those prices. Penalties and interest may also apply. Registration can be backdated, generally by up to 4 years.
Questions
Do overseas sales count toward the A$75,000 GST threshold?
Yes, if you are an Australian business making sales connected with Australia. GST-free exports are included in your GST turnover.
Is the GST threshold based on profit or income?
Income. GST turnover is your total business income, less GST and a few excluded items, not your profit.
How long do I have to register for GST?
21 days from when your current or projected GST turnover reaches the threshold.
Can I register for GST voluntarily?
Yes. If you register by choice, you generally must stay registered for at least 12 months.
How Foderis helps
Foderis keeps your sales in one place, with Stripe connected directly and bank files imported with AI-suggested categories, so your rolling turnover is easy to see. Once you are registered, it works out GST on Australian sales, treats overseas sales as exports, and has your Simpler BAS figures ready to copy each quarter. Foderis is hosted in Sydney and costs A$9 a month, with a 30-day free trial.
This is general information, not tax advice. Your situation may differ: check with your accountant or the ATO.