How to register for GST as a sole trader, step by step

When you have to register

Registration is compulsory when your GST turnover reaches $75,000 in any rolling 12 months, or when you expect it to; the threshold is $150,000 for non-profits; and it is compulsory from the first dollar for taxi and rideshare drivers. You have 21 days from the point you cross the line. Below that, registration is voluntary and worth considering if your customers are mostly businesses and your purchases carry a lot of GST. The decision is covered in do I need to register for GST and the threshold in detail in the $75,000 threshold explained.

Step 1: have an ABN

GST registration attaches to an ABN, so you need one first. If you do not, apply on the Australian Business Register (abr.gov.au). It is free and usually instant for a sole trader with a tax file number. The application asks whether you want to register for GST at the same time; if you know you need to, say yes and the two are done together.

If you already have an ABN, skip to step 2.

Step 2: choose how to register

Three routes, all free:

• ATO online services through myGov. Go to Tax, then Manage, then Registrations, and add GST. This is the usual route for an existing sole trader.
• The Australian Business Register, as part of a new ABN application or by updating an existing ABN.
• Your registered tax or BAS agent, who can do it through their own portal.

You can also phone the ATO’s business line. Whichever you use, you will be asked the same three questions.

Step 3: the three choices

Start date. The date your registration takes effect. It can be today, a date in the near future (for example the first of next month, to keep your first period tidy), or a date in the past. Backdating is allowed up to four years, but you owe GST on every taxable sale from that date whether or not you charged it, so only backdate if you have to, typically because you crossed the threshold earlier and are registering late.

Reporting cycle. Quarterly is the default and what most sole traders use. Monthly is optional (compulsory above $20 million). Annual reporting may be offered if you are registering voluntarily under the threshold. See monthly vs quarterly BAS.

Accounting basis. Cash means you report GST when money is received or paid; accruals means when invoices are issued or received. Almost every sole trader is eligible for cash and most choose it, because the BAS then matches the bank statement. See cash vs accruals.

Step 4: confirmation

The ATO confirms your registration in online services and by post or myGov message. ABN Lookup updates to show Registered for GST from your start date, which some larger customers check before paying an invoice. Your first activity statement appears in online services for the period from your start date to the end of that quarter, with its due date shown.

Step 5: what to change on day one

• Prices. Add 10% to your prices, or absorb it. Business customers claim it back, so quoting ex-GST plus GST is standard with them.
• Invoices. Your invoices become tax invoices: the words Tax invoice, your ABN, the date, a description and the GST amount. See tax invoice requirements.
• Records. Keep tax invoices for purchases over $82.50 so you can claim the GST. Start categorising expenses with GST in mind.
• A GST account. Move one eleventh of every payment received into a separate account each week. The BAS is then funded before it is due.
• Software. Set your bookkeeping to GST registered from the start date so it stops treating your sales as GST-free. In FlowFi that is one setting and the BAS page appears with the period ready.

Purchases made before you registered

If you bought equipment or stock shortly before your start date and still hold it for the business, some of the GST may be claimable on an early BAS under the rules for pre-registration acquisitions. The detail depends on timing and the type of purchase, and it is worth asking your accountant before the first statement rather than after.