Introduction
Goods and Services Tax (GST) is one of the most important tax obligations for Australian businesses. While the rate is simple 10% the rules around registration, reporting, and compliance can quickly become complex, especially for growing SMEs
Whether you’re a sole trader, eCommerce business, tradie, consultant, or company, understanding GST is essential to staying ATO‑compliant and avoiding unnecessary penalties
This guide breaks down GST in simple terms and shows how cloud bookkeeping can help you stay accurate, efficient, and audit‑ready
Key Challenges Businesses Face
Many business owners struggle with GST because
Not knowing when they must register
Many businesses exceed the $75,000
GST turnover threshold without realising it
Confusing GST‑free vs. input‑taxed sales
Especially common in health services, food businesses, education providers, and financial services
Errors in BAS reporting
Incorrect GST on purchases or sales is one of the most common ATO audit triggers
Manual bookkeeping causing missed claims
Lost receipts = lost GST credits
When You Must Register for GST
According to the ATO, you must register for GST if
Your annual GST turnover exceeds $75,000
(GST turnover = total revenue excluding GST)
You start a new business and expect turnover to exceed the threshold
Even if it’s your first year
You operate as a rideshare or taxi driver (e.g., Uber, Didi)
Registration is mandatory regardless of turnover
You want to voluntarily register
Many businesses register early to claim GST credits
How to Report GST (BAS Reporting)
Your GST is reported through the Business Activity Statement (BAS)
Depending on your business size, you may lodge
Monthly BAS turnover above $20M
Quarterly BAS most SMEs
Annual GST Return only if voluntarily registered with low turnover
BAS includes: ✔ GST on sales (GST collected)
GST on purchases (GST credits)
PAYG instalments
PAYG withholding (if you employ staff)
Accurate bookkeeping ensures your BAS reflects real income and expenses, preventing ATO discrepancies
Common GST Mistakes SMEs Should Avoid
Charging GST when you're not registered
Illegal + creates ATO problems
Claiming GST on non‑GST items
Examples: bank fees, ATO charges, certain government fees
Mixing personal & business expenses
ATO rejects credit claims if transactions are unclear
Incorrectly categorising GST‑free or input‑taxed items
Such as fresh food, certain health services, education, and financial services
Failing to keep proper receipts
Cloud storage is essential for audit protection
Not reconciling accounts before lodging BAS
Unreconciled transactions = incorrect GST totals
Smart Tools to Make GST Easy (Recommended Cloud Systems)
Xero
Real‑time GST tracking, BAS summaries, automatic reconciling
MYOB
Great for inventory-based businesses; strong tax reporting tools
QuickBooks Online
User‑friendly and excellent for service businesses
Cloud bookkeeping reduces errors, ensures up‑to‑date reporting, and supports ATO compliance with secure digital audit trails
The Role of Online Bookkeeping in GST Compliance
A reliable bookkeeping system ensures
Accurate GST on every invoice
Correct coding of expenses
Automatic GST summaries for BAS
Real-time reporting for decision-making
No missing receipts
Peace of mind during ATO audits
At Pars Business Solutions, we ensure your GST, BAS, payroll, and reporting remain 100% compliant so you can focus on running your business
Why Pars Business Solutions Is the Right Partner
Choosing Pars means gaining a partner who
Understands ATO rules inside out
Specialises in GST, BAS, payroll & reconciliation
Works across Xero, MYOB & QuickBooks
Provides clear, expert guidance for all industries
Offers accurate, real-time online bookkeeping
Supports your financial decisions with high-quality reporting
We’re more than bookkeepers
We’re your financial advisors here to help your business grow
FAQ
?What is the GST rate in Australia
The GST rate is 10% on most goods and services
?What happens if I don’t register for GST on time
ATO may issue penalties, require back‑dated GST payments, and charge interest
?Can I claim GST credits without receipts
You need valid tax invoices for claims over $82.50
?Are all products GST‑inclusive
No. Some items are GST‑free (e.g., fresh food), and some are input‑taxed (e.g., financial services)
