When you set up a new small business, you’ll have the option to register for GST. Here’s what you need to know about this responsibility:
The first thing you should do is decide whether you’ll register for GST immediately or wait until you hit the earning threshold of $75,000. When you start a new business, you might not be entirely confident of your projected earnings, so it’s fine to hold off until you’re sure you’ll hit the threshold. Once you do reach $75,000, you have 21 days to register.
Understanding your GST turnover
The $75,000 turnover figure represents your gross business income - not your profit. There are some exclusions, like sales outside of Australia, and any sales that are not for payment, meaning they aren’t taxable.
It’s important to monitor your profit closely because if you fail to register, you may have to pay GST on any sales since the date you were supposed to register. And because you won’t have included any GST in those sale prices, you could lose money. Additionally, there could be interest or penalties imposed.
Once you’re registered
When you’ve hit the threshold and you’re registered for GST, you’ll add the 10% amount to the price of your product or services. Don’t make the mistake of considering this money as part of your profit. You’re merely collecting it to pay to the ATO. It’s really important to establish good business accounting practices to make sure that you’re keeping this money separate.
We make dealing with GST simple - so you can focus on running your business. Make a time to talk to us about GST for your business.