What Is GST? Australia’s 10% Goods and Services Tax Explained

Short answer: GST stands for goods and services tax. It’s a tax of 10% on most goods, services and other items sold or consumed in Australia. Businesses registered for GST add it to their prices, pay it to the Australian Taxation Office (ATO) through their BAS and claim back the GST on their own business purchases, so the final consumer ends up carrying the cost. Registration is compulsory once your GST turnover reaches $75,000 ($150,000 for non-profits), and some sales, such as basic food and most medical services, are GST-free.

GST is a federal tax that the ATO administers. The rate is 10% for both the 2025–26 and 2026–27 income years, and it’s the same in every state and territory. This guide is the starting point for sole traders and small businesses. For the maths, see how to calculate GST. If you think you’ve reached the threshold, go to how to register for GST.

What does GST stand for, and how much is it?

GST stands for goods and services tax, and in Australia it’s charged at 10% of the price before GST. In a GST-inclusive price, it makes up one-eleventh of the total.

GST is a broad-based tax on most goods, services and other items sold or consumed in Australia. It applies to sales made on or after 1 July 2000, when the A New Tax System (Goods and Services Tax) Act 1999 took effect. The numbers you’ll meet most often are these:

GST figure	Amount
GST rate	10% of the price before GST
GST inside a GST-inclusive price	One-eleventh of the total
Compulsory registration	GST turnover of $75,000 or more
Compulsory registration, non-profits	GST turnover of $150,000 or more
Taxi, limousine and ride-sourcing drivers	Must register whatever they earn
Tax invoice needed to claim a GST credit	Purchases over $82.50 including GST
Buyer’s identity or ABN on a tax invoice	Sales of $1,000 or more

So a $400 job becomes $440 with GST, and a $77 receipt that says “includes GST” contains $7 of GST.

How does GST work from supplier to customer?

Each GST-registered business in a chain pays the ATO the GST it collects, minus the GST it paid on its own business purchases. The consumer at the end pays the full 10% and can’t claim it back.

The ATO describes it this way: registered businesses include GST in their prices and claim credits for the GST in the price of what they buy for the business. If the GST collected is more than the credits, they send the difference with their activity statement.

Here’s how that works for a carpenter building a deck for a household:

Step	Price including GST	GST in the price	Paid to the ATO
Timber yard sells materials to the carpenter	$1,100	$100	$100, by the timber yard
Carpenter invoices the household	$3,300	$300	$300 − $100 credit = $200
Household pays	$3,300	$300	Nothing; it can’t claim a credit

The ATO receives $300 in total ($100 + $200), which is exactly the GST in the price the household paid. The carpenter collects $300, claims $100 back and pays $200, so the GST costs the carpenter nothing.

Who has to charge GST?

Only businesses registered for GST charge it. If you’re not registered, you don’t add GST, you don’t show a GST amount and you don’t issue tax invoices.

You must register for GST within 21 days once your GST turnover reaches $75,000, counting either this month plus the previous 11 or this month plus the next 11. GST turnover is gross business income, not profit. Taxi, limousine and ride-sourcing drivers must register before their first trip, regardless of income. You can also register voluntarily below the threshold. You need an ABN to register for GST, and registering is free.

Once registered, business.gov.au sums up the three obligations: you include GST in the price of most things you sell, claim GST credits on most business purchases, and lodge activity statements reporting your sales, the GST on them and your credits. Your invoices also become tax invoices, with the details the ATO sets out. How to invoice as a sole trader covers both kinds of invoice.

What is GST-free and what is input-taxed?

GST-free and input-taxed sales both carry no GST. The difference is that with GST-free sales you can still claim credits on related purchases, and with input-taxed sales you generally can’t.

Type	Common examples	Charge GST?	Claim GST credits on related purchases?
Taxable (the default)	Most goods and services: trade work, consulting, retail goods	Yes, 10%	Yes
GST-free	Most basic food; most medical, health and care services; most education courses; exports	No	Yes
Input-taxed	Residential rent; sales of existing homes; financial supplies such as lending money	No	Generally no

Most sole traders sell taxable services and never need the other two rows. They matter if you mix them. A market stall selling fresh produce alongside other goods, for example, has to show which items on each tax invoice are taxable, and the divide-by-11 shortcut no longer works on the total.

Property is the other special case. When a business sells property under the margin scheme, the GST is one-eleventh of the margin (broadly, the sale price minus what was paid for the property) rather than one-eleventh of the whole price. It needs a written agreement before settlement, and the buyer can’t claim a GST credit.

What does GST-inclusive pricing mean?

A GST-inclusive price already has the 10% built in, so the customer pays the price shown and nothing more. A GST-exclusive price, often written ”+ GST”, has the GST added on top.

When you advertise to consumers, business.gov.au says the total price must include all taxes, GST included. A mobile mechanic’s website should say “Logbook service $330”, not “$300 + GST”. Quotes to other businesses often show prices excluding GST, because a GST-registered client claims the GST back and thinks in GST-exclusive figures. Either way, make it obvious which one you mean.

On a tax invoice, you either show the GST amount or, if the GST is exactly one-eleventh of the total, state that the total price includes GST. The tax invoice rules allow that shortcut only when every item is fully taxable.

How do businesses report and pay GST?

Registered businesses report GST on a business activity statement (BAS), usually every quarter. You report total sales at G1, the GST on your sales at 1A and the GST credits on your purchases at 1B. You pay the difference, or the ATO refunds it.

Quarterly BAS falls due on 28 October, 28 February, 28 April and 28 July. If you registered voluntarily and your GST turnover stays under $75,000, you can choose annual GST reporting instead.

A quarter for a GST-registered graphic designer might look like this. She invoiced $16,500 including GST, so 1A is $16,500 ÷ 11 = $1,500. Her business purchases came to $2,200 including GST, so 1B is $200. She pays $1,300. What a BAS is explains the form, and how to do a BAS walks through each label.

Can you get a GST refund?

Yes, in two situations. A registered business gets a refund when its GST credits for a period are more than the GST on its sales. A traveller can claim GST back on some goods taken out of Australia.

Business refunds. If your GST credits are higher than the GST you have to pay for a period, the ATO refunds the difference. It’s common in a quarter when you buy a vehicle or expensive tools. A landscaper with $990 of GST on sales and $1,800 of GST credits after buying a $19,800 mower gets $810 back. To claim a credit on any purchase over $82.50, you need a tax invoice from the supplier.

Travellers. The tourist refund scheme lets Australians and overseas visitors claim GST back on goods bought in Australia and taken overseas. You must have spent $300 or more (including GST) with one business, with the same ABN, within 60 days of departure, and you need the original tax invoices. The Department of Home Affairs and the Australian Border Force run it, not the ATO.

Consumers can’t claim GST back on everyday purchases. Only GST-registered businesses claim credits.

Where do your GST records come from, and where does Keel fit?

Every GST figure on a BAS traces back to an invoice you issued or a receipt you kept, and the ATO expects you to keep those records for five years.

Keel: Invoice Maker & Receipts, by Ilura Technology OÜ, is an iPhone app for keeping those documents together. You write estimates, and an accepted estimate becomes the invoice in one tap. Invoices are PDFs, and every quote, receipt, expense and invoice sits under its job. A “who owes you” list drafts reminders that you review and send yourself. Records stay on your iPhone: no account, no bank connection, no cloud sync, and the App Store privacy label reads “Data Not Collected”.

Keel doesn’t work out your GST, lodge your BAS or connect to the ATO. It’s a record keeper. It’s free with no invoice limit, and free invoices carry a small “Made with Keel” footer. Keel Lifetime is a one-time purchase ($249.99 USD; the App Store shows your local price) that adds custom branding, a signature, premium templates and accountant-ready exports. Keel on the App Store. More on GST, ABNs and BAS is in the Australia guides.

Frequently asked questions

What does GST stand for? GST stands for goods and services tax. In Australia it’s a 10% tax on most goods, services and other items sold or consumed in the country. Businesses registered for GST collect it and pay it to the ATO, and claim back the GST on their own business purchases. Other countries, including New Zealand and Canada, also have a GST, but at different rates and under different rules.

How much is GST in Australia? GST is 10% of the price before GST. That means it’s one-eleventh of a GST-inclusive total: a $110 price includes $10 of GST, and a $1,100 price includes $100. To add GST, multiply by 1.1. To find the GST in a total, divide by 11. The rate is the same for the 2025–26 and 2026–27 income years.

Is GST the same in Western Australia and every other state? Yes. GST is a federal tax, so the rate is 10% in Western Australia, New South Wales and every other state and territory, and the same rules apply everywhere. State taxes such as stamp duty and payroll tax are separate and don’t change how GST works on your invoices.

When was GST introduced in Australia? GST started on 1 July 2000 under the A New Tax System (Goods and Services Tax) Act 1999. It applies to taxable sales made on or after that date. The rate has been 10% since then.

Do sole traders have to charge GST? Only if they’re registered for GST. Registration is compulsory once your GST turnover reaches $75,000 in a 12-month period, current or projected, and you then have 21 days to register. Taxi, limousine and ride-sourcing drivers must register before their first trip whatever they earn. Below the threshold you can register voluntarily, but you don’t have to.

Can I get a GST refund? If you’re registered for GST and your GST credits for a period are more than the GST on your sales, the ATO refunds the difference through your BAS. Travellers can claim GST back on goods they take overseas under the tourist refund scheme, provided they spent $300 or more with one business within 60 days of departure. Consumers can’t otherwise claim GST back.

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This article is general information, not tax advice. Consult a qualified Australian tax professional.