How GST actually works
GST is a flat 10% tax added to most goods and services sold in Australia, set out in A New Tax System (Goods and Services Tax) Act 1999 (Cth) and administered by the Australian Taxation Office. It hasn't moved since it was introduced in 2000, so the maths is stable even if the numbers around it change. To add GST to a price, multiply the GST-exclusive amount by 1 plus the rate. To pull GST back out of a price that already includes it, divide the GST-inclusive total by the same figure. That second calculation trips more people up than the first, because you can't just take 10% off the total. The GST component of a GST-inclusive price is smaller than 10% of the total, since the tax was calculated on the smaller, GST-exclusive base.
When you actually have to charge it
Charging GST is only compulsory once you're registered, and registration is only compulsory once your GST turnover reaches the ATO's threshold. Read the exact figure and how "GST turnover" is worked out on our ABN and GST threshold checker. Below that, whether to register voluntarily is a genuine choice: it lets you claim GST credits on what the business buys, but it also means adding 10% to every invoice, which matters if your customers are mostly the public rather than other GST-registered businesses who can claim the GST back themselves. Not-for-profits get a materially higher threshold before registration is required, worth checking separately if that's your structure.
Quoting the wrong way round
The most common trade error isn't the arithmetic, it's which number a customer was actually quoted. If you tell someone a job is "$800" and mean $800 before GST, and they hear $800 all up, that's an $80 gap you eat unless the quote said so in writing. The fix is cheap: always state whether a figure is "plus GST" or "GST inclusive" on quotes and invoices, not just on the final bill. A tax invoice has its own ATO formatting rules. See our tax invoice generator for what has to be on it once a sale reaches the ATO's reporting threshold.
Claiming it back
If you're GST-registered, you can generally claim a GST credit for the GST included in what you pay for materials, tools, fuel and other business purchases, provided you hold a valid tax invoice. That's the other half of this calculator: run a materials invoice through "take GST off" to see the actual GST component you're entitled to claim back on your next BAS, separate from the ex-GST cost that's the real input to your job costing.
Reporting it once you're registered
Registration also means lodging a Business Activity Statement, usually quarterly for a small business, where you report GST collected on sales against GST credits claimed on purchases and pay or receive the difference. This calculator won't do your BAS for you, but the same "add or take off" logic is what sits behind almost every line on it: sales are reported GST-exclusive, GST collected is reported separately, and the same applies in reverse for what you've bought. Getting comfortable with the two directions here is most of what you need to read a BAS without a bookkeeper translating it first, and the ATO's own guidance on business activity statements covers the reporting cycle and due dates in full.
GST-free and input-taxed are not the same thing
Not every sale sits in the same bucket for GST purposes, and mixing the two up is an easy way for a small error to creep into a return. A GST-free sale charges no GST, but if you're registered, you can still claim GST credits on the costs that went into making it. Basic food, most health services and exports generally sit in this category. An input-taxed sale also charges no GST, but here you generally can't claim GST credits on the related costs either, and the two a trade or small business is most likely to run into are residential rent and financial supplies. Treat an input-taxed sale as though it were GST-free on a return and the numbers won't reconcile. The Australian Taxation Office's GST guidance sets out the full list of categories, and it's worth checking directly rather than guessing which one applies.
GST on a deposit or a progress payment
A deposit that's genuinely security, refundable if the job falls through before it starts, is treated differently to money that's actually payment for part of the work. A progress payment on a build or a renovation is consideration for a taxable supply the same as any other invoice, and GST applies to it in the period it's invoiced or received. Where it gets messy is when a "deposit" in a contract is really the first progress payment wearing a different name. If a job runs on staged payments, the safer approach is to invoice each stage as what it actually is and charge GST at that point, rather than treating early money as sitting outside the GST system until the final invoice. How a payment is described in the contract can genuinely change how it's treated, so this is worth running past your accountant on a specific job rather than assuming one rule covers every deposit.
Trading in, bartering, and non-cash deals
Not every transaction involves cash changing hands, and GST doesn't care either way. Take an old ute off a customer as part payment for a job, or swap work with another trade (you fit their bathroom, they wire your new shed), and GST still applies to both sides of that deal, worked out on the market value of what was exchanged, not just whatever dollar figure got invoiced. It's easy to only think about the money that actually landed in the account and forget the value of what was handed over instead. Get the market value wrong and both the GST charged and the GST credit claimed on the other side of the deal end up wrong too. If barter or trade-ins are a regular part of how you do business, it's worth a specific conversation with your accountant about how to value and record them properly.
A vehicle used partly for private trips
Plenty of trade vehicles do double duty, on the tools through the week, doing the school run or a weekend trip the rest of the time. Where a vehicle is used partly for the business and partly for private use, the GST credit you can claim on its running costs generally has to be worked out on the business-use proportion, not claimed in full. Fuel, servicing and insurance all fall under the same logic, and so does the vehicle itself if it's ever sold. A rough log of business versus private kilometres over a representative period is usually what supports the split, and it's the kind of record worth keeping as you go rather than reconstructing from memory months later. The apportionment method, and what counts as representative, both depend on your situation, so this is genuinely one for your accountant rather than a rule of thumb.
When a customer won't pay the GST portion
This one isn't really a GST question. It's a quoting and contract question that GST happens to sit inside. If a customer refuses to pay the GST component of an invoice, that GST is still owed to the ATO once you're registered and the sale is taxable, whether or not the customer actually hands it over. You can't reduce what you report and pay based on what a customer decided to withhold. The fix sits upstream of the argument: state clearly on every quote whether the figure is plus GST or GST inclusive, get it agreed before the job starts, and treat a customer who won't pay an amount that was clearly quoted as a debt recovery problem, not a reason to quietly absorb the shortfall or under-report the sale. Chasing the money is a separate, and much less risky, problem than getting the reporting wrong to make an awkward conversation go away.
BAS timing: cash basis versus accruals
How you report GST also depends on which accounting basis you're on, cash or accruals, and the two can genuinely shift which BAS period a sale lands in. On a cash basis, GST is reported in the period you actually receive the payment. On accruals, it's reported in the period you issue the invoice, whichever comes first, regardless of when the customer actually pays. A business that does most of its invoicing late in a quarter and gets paid the following quarter can see a real difference between the two methods, especially around 30 June. Most small businesses can choose cash accounting if their turnover sits under the relevant threshold, and the ATO's guidance on business activity statements sets out who's eligible and how to switch. Once your ex-GST price is settled, our markup and margin calculator is the next check, since being GST-compliant and being profitable are two separate questions.
Where this fits with the rest of the admin
None of this is exotic. It's the same 10%, the same two directions, on every quote, invoice and BAS a business touches. What changes is how much of it you do by hand. A quoting and invoicing system that already knows your GST status turns "is this plus or inclusive" from a daily judgement call into a setting you tick once. See what we build under business systems. It's also worth checking your public pricing is unambiguous about GST before a customer ever calls, particularly if your website or Google listing quotes a starting price, our web design work covers that, and our pricing page shows how Delta itself quotes, GST-exclusive, so you're never guessing what a figure in front of you actually means.