GST is one of the simplest taxes in Australia — once you know the two formulas. Everything runs off 10%, which means adding GST is a single multiplication, and removing it is a single division. Yet thousands of small businesses still get it wrong each year, either charging GST when they are not registered, forgetting to include it on invoices, or incorrectly claiming input tax credits. This guide cuts through the confusion.
Australia's Goods and Services Tax has operated at 10% since 1 July 2000. The rate has not changed, and the core mechanics have stayed consistent. What trips businesses up is not the rate — it is the rules around registration, GST-free supplies, BAS obligations, and the difference between GST-free and input-taxed supplies. We will cover all of it here.
Last updated: May 2026.
Use Our Free GST Calculator
Before diving into the theory, try the tool. Leadkit's GST calculator lets you add or remove GST from any amount instantly — no spreadsheet required. Across the quotes generated on Leadkit's platform, GST handling is one of the most common points of confusion for both businesses and consumers, which is why we built it to be as straightforward as possible.
How to Add GST to a Price
Adding GST means converting an ex-GST (exclusive) price into a GST-inclusive price.
Formula: Price (ex-GST) × 1.1 = GST-inclusive price
That is it. You are multiplying by 1.1 because you are adding 10% on top of the base amount.
Common "Add GST" Examples
| Ex-GST Amount | × 1.1 | GST-Inclusive Amount |
|---|---|---|
| $50 | × 1.1 | $55.00 |
| $100 | × 1.1 | $110.00 |
| $250 | × 1.1 | $275.00 |
| $500 | × 1.1 | $550.00 |
| $1,000 | × 1.1 | $1,100.00 |
| $5,000 | × 1.1 | $5,500.00 |
| $10,000 | × 1.1 | $11,000.00 |
If you are issuing a tax invoice, you must show the GST amount separately, or state that the total includes GST and show the GST amount.
How to Remove GST from a Price
Removing GST means working backward from a GST-inclusive price to find the original ex-GST amount, or to isolate the GST component.
Formula to find the ex-GST amount: GST-inclusive price ÷ 1.1 = ex-GST amount
Formula to find just the GST amount: GST-inclusive price ÷ 11 = GST component
Common mistake: Many people try to remove GST by multiplying by 10% and then subtracting. That gives the wrong answer. $110 × 10% = $11, and $110 − $11 = $99. But the correct ex-GST price is $110 ÷ 1.1 = $100. The difference seems small at $110, but it compounds quickly on larger amounts.
Common "Remove GST" Examples
| GST-Inclusive Amount | ÷ 1.1 (ex-GST) | ÷ 11 (GST only) |
|---|---|---|
| $55 | $50.00 | $5.00 |
| $110 | $100.00 | $10.00 |
| $275 | $250.00 | $25.00 |
| $550 | $500.00 | $50.00 |
| $1,100 | $1,000.00 | $100.00 |
| $5,500 | $5,000.00 | $500.00 |
| $11,000 | $10,000.00 | $1,000.00 |
For instant results without mental arithmetic, use the Leadkit GST calculator.
GST-Free vs Input-Taxed Supplies
This is where most people get confused. Not all supply types work the same way under GST. The Australian Taxation Office (ATO) classifies supplies into three categories:
| Supply Type | GST Charged? | Input Tax Credits Claimable? | Examples |
|---|---|---|---|
| Taxable supply | Yes (10%) | Yes | Most goods and services — consulting, tradework, retail |
| GST-free | No | Yes | Basic food, medical, education, exports, residential rent |
| Input-taxed | No | No | Financial services, residential rent (sale), precious metals |
GST-Free Supplies — With Examples
The following are GST-free under the A New Tax System (Goods and Services Tax) Act 1999:
- Basic food — Unprocessed food, fruit, vegetables, bread, milk. Prepared meals and snacks (e.g., hot chips, sushi) are generally taxable.
- Medical and health services — GP consultations, hospital stays, most allied health services provided by registered practitioners. Private health insurance is also GST-free.
- Education — Courses supplied by registered schools, TAFEs, and universities. Private tutoring is generally taxable.
- Exports — Goods physically exported from Australia within 60 days of payment or supply.
- Residential rent — Renting out a residential property to a tenant. Note: commercial rent is taxable.
- Childcare — Approved childcare services provided by registered operators.
Key point: You do not charge GST on GST-free supplies, but you can still claim input tax credits (ITCs) on the business expenses you incur to make those supplies. This is what distinguishes GST-free from input-taxed.
Input-taxed supplies (like residential property sales and most financial services) mean you neither charge GST nor claim ITCs on related costs.
GST Registration: When You Must Register
The $75,000 Threshold
You are required to register for GST if your current or projected GST turnover reaches $75,000 per year (or $150,000 for non-profit organisations). This threshold is based on gross revenue — income before expenses, not profit.
Once you hit or expect to hit this threshold, you have 21 days to register with the ATO. You can register online via the Australian Business Register (ABR) or through a registered tax agent.
To register, you need an Australian Business Number (ABN) — you cannot have a GST registration without one.
Voluntary Registration
If your turnover is below $75,000, you can still choose to register voluntarily. This makes sense if:
- Most of your clients are GST-registered businesses (they can claim back the GST you charge them, so it is not a burden to them).
- You have significant business expenses with GST included — registration lets you claim those ITCs and recover that cost.
- You expect to cross the threshold soon and want clean records from the start.
The downside is added compliance — once registered, you must lodge BAS statements and collect GST on all taxable supplies.
Rideshare and Taxi Exception
Uber, DiDi, Ola, and taxi drivers must register for GST from their first dollar of income, regardless of turnover. The $75,000 threshold does not apply to this category. This catches many part-time rideshare drivers off guard.
BAS Explained: What It Is and How It Works
A Business Activity Statement (BAS) is the form you submit to the ATO to report and pay your GST obligations (along with other taxes like PAYG withholding and PAYG instalments).
How Often Do You Lodge?
- Quarterly — Most small businesses with a GST turnover under $20 million. Due on the 28th of the month following the quarter (e.g., Q1 July–September is due 28 October).
- Monthly — Businesses with a turnover over $20 million, or those who voluntarily opt in.
- Annually — Available for very small businesses with a turnover under $75,000 (those who are voluntarily registered only).
What Goes Into a BAS?
Your BAS captures:
- GST collected — Total GST you charged customers on taxable supplies.
- GST credits (ITCs) — Total GST included in your business purchases that you can claim back.
- PAYG withholding — Tax withheld from employee wages.
- PAYG instalments — Prepayments of your own income tax (if applicable).
The net GST amount is either paid to the ATO or refunded (if your ITCs exceed what you collected).
DIY vs Accountant
Many small businesses handle their own BAS using accounting software like Xero, MYOB, or QuickBooks, which automate most of the GST categorisation. However, if your affairs are complex — multiple supply types, mixed-use assets, or you are unsure about ITC eligibility — a Registered BAS Agent can lodge on your behalf and take legal responsibility for the accuracy of the statement. The Tax Practitioners Board maintains the register of licensed agents.
Common GST Mistakes Small Businesses Make
1. Charging GST Before Registering
You cannot charge customers GST until you are registered. If you collect it without being registered, you are holding money you cannot legally keep and will need to refund it. Register first, then charge.
2. Not Registering Once You Hit the Threshold
Missing the 21-day registration window can result in ATO penalties and interest. Monitor your rolling 12-month turnover regularly — the threshold applies to projected turnover as well, so if you land a large contract that will push you over, you need to register before the work starts.
3. Incorrectly Claiming Input Tax Credits
You can only claim ITCs for business-related purchases that include GST. You cannot claim ITCs on GST-free purchases (they do not have GST in them), personal purchases, or expenses for making input-taxed supplies. Claiming incorrectly is a common audit trigger.
4. Forgetting to Include GST on Tax Invoices
If you are registered and making taxable supplies, your invoices must either show the GST amount separately or state the total is GST-inclusive and include the GST amount. Invoices over $1,000 must also include the recipient's ABN.
5. Confusing "GST-free" with "No GST Registration Needed"
Making GST-free supplies does not exempt you from the registration threshold. If you sell basic food and your turnover exceeds $75,000, you still need to be registered — you just do not charge GST on those sales.
6. Treating the GST Account as Business Revenue
GST collected is not your money — it belongs to the ATO. A common cash flow mistake is spending collected GST before the BAS is due, then facing a tax debt. Keep GST funds in a separate account or sub-ledger.
Frequently Asked Questions
What is the current GST rate in Australia? The GST rate is 10%, and it has been since GST was introduced on 1 July 2000. There is no indication from the current government that this rate will change.
Do I need an ABN to register for GST? Yes. An ABN is required before you can register for GST. You can apply for an ABN through the Australian Business Register. Most businesses can register online within minutes.
How do I remove GST from a price? Divide the GST-inclusive price by 1.1. For example, $550 ÷ 1.1 = $500 (ex-GST). To find just the GST component, divide by 11: $550 ÷ 11 = $50. Do not subtract 10% — that gives the wrong result.
Is rent subject to GST in Australia? Residential rent is GST-free, so landlords do not charge GST and cannot claim ITCs on residential rental expenses. Commercial rent is a taxable supply — GST applies.
What happens if I am late lodging my BAS? The ATO may apply a Failure to Lodge (FTL) penalty of one penalty unit (currently $330) per 28-day period that the statement is overdue, up to a maximum of five units ($1,650 for small businesses). Interest may also apply to any unpaid amount.
Can I claim GST on my car if I use it partly for business? Yes, but only for the business-use portion. If you use your car 60% for business, you can claim 60% of the GST on fuel, servicing, and registration. Log books are the ATO's preferred method for establishing the business-use percentage.
Conclusion
GST is straightforward at its core — 10% added by multiplying by 1.1, and removed by dividing by 1.1. The complexity lives in the rules around what is taxable versus GST-free versus input-taxed, when you must register, and how BAS obligations work in practice.
Use the Leadkit GST calculator to handle the arithmetic instantly, and bookmark the ATO's GST for business guide for the definitive rules on your specific supply types.
If you need to understand how GST interacts with your overall tax position, the Leadkit income tax calculator is a useful companion tool.
This article is general information only. For advice specific to your business, consult a registered tax agent or BAS agent. GST rules are set by the ATO and subject to legislative change.