GST is one of those topics that causes unnecessary anxiety for new freelancers. When do you need to register? How do you add it to invoices? Where does the money go? What even is a BAS?
The good news: once you understand how it actually works, GST is fairly straightforward to manage. This guide covers everything an Australian freelancer needs to know — without the jargon.
GST (Goods and Services Tax) is a 10% tax on most goods and services sold in Australia. As a registered business, you act as a collector for the ATO — you add GST to your invoices, your clients pay it, and you periodically send that money to the ATO.
The critical thing to understand is that GST is not your income. If you charge $100/hr + GST, your client pays $110. You keep $100 and send $10 to the ATO. You were never entitled to that $10 — you're simply the vehicle through which it flows to the government.
This also works in your favour. When you buy things for your business — software, equipment, accounting fees — you can claim back the GST component you paid. This is called an input tax credit.
GST registration is mandatory once your annual turnover reaches or is likely to reach $75,000. This is your gross revenue — the total you invoice clients before any deductions for expenses, super, or tax.
You must register within 21 days of exceeding the threshold. Waiting until tax time to sort it out is not acceptable to the ATO — if you've been operating above $75,000 without registering, you'll owe the GST you should have collected, potentially out of your own pocket.
Yes. Some freelancers register voluntarily even below the threshold — usually because their clients are GST-registered businesses who can claim back the GST anyway, making it cost-neutral for them. Voluntary registration also lets you claim input tax credits on your business purchases, which can be worthwhile if you have significant expenses.
Registration is done through the ATO. You'll need an ABN first (if you don't have one, apply at abr.gov.au — it's free and usually processed within a few days). Then:
Most freelancers opt for quarterly BAS lodgement — it's the most common cycle and strikes a reasonable balance between admin burden and cash flow management.
Once registered, every invoice needs to show GST separately. The standard practice is to quote your base rate and add GST on top — not to absorb it into your rate.
Never absorb GST into your base rate. Quoting "$121/hr including GST" when you should be charging "$110/hr + GST" means you're effectively discounting your rate by 9.1% to cover the tax for your client — which is their job, not yours.
For invoices over $1,000, a valid tax invoice must include:
For invoices under $1,000 the requirements are slightly simpler, but it's easiest to use a consistent template for all invoices regardless of amount. Accounting software like Xero, QuickBooks, or even free tools like Invoice Ninja handle this automatically.
A Business Activity Statement (BAS) is how you report and pay GST to the ATO. If you're lodging quarterly, you'll submit four BAS forms per year — one for each quarter ending September, December, March, and June.
Each BAS asks you to report:
| Quarter | Period covers | Due date |
|---|---|---|
| Q1 | July – September | 28 October |
| Q2 | October – December | 28 February |
| Q3 | January – March | 28 April |
| Q4 | April – June | 28 July |
If you use a registered tax agent to lodge your BAS, you generally get an extended deadline — which is one of the practical benefits of having an accountant handle this for you.
Most freelancers lodge via ATO Online Services or through their accounting software, which can submit directly to the ATO. If you use Xero or QuickBooks, BAS preparation is largely automated — the software tracks your GST collected and paid throughout the quarter and generates a pre-filled BAS ready for review and submission.
This is where many new freelancers come unstuck. When a client pays your GST-inclusive invoice, the full amount lands in your bank account. It's tempting to treat it all as income — but roughly 1/11th of every GST-inclusive payment belongs to the ATO.
The safest approach is to transfer GST to a separate account immediately when each invoice is paid. If a client pays you $11,000 (which includes $1,000 GST), move $1,000 to a dedicated GST holding account on the day of receipt. When your BAS is due, the money is sitting there waiting — no scrambling, no stress.
One genuine benefit of GST registration is that you can claim back the GST you pay on business purchases. If you pay $1,100 for accounting software (including $100 GST), you can claim that $100 as an input tax credit on your BAS — reducing your net GST payable.
Common business purchases where you can claim input tax credits:
| Expense | GST claimable? | Notes |
|---|---|---|
| Accounting software (Xero, MYOB) | Yes | Must be for business use |
| Professional indemnity insurance | Yes | Full amount if 100% business |
| Work laptop or equipment | Yes | Pro-rata if mixed personal/business |
| Accountant or tax agent fees | Yes | For business tax services |
| Professional development courses | Yes | If directly related to your work |
| Home internet (partial) | Partial | Business-use proportion only |
| Personal groceries, clothing | No | Not business expenses |
To claim input tax credits you need a valid tax invoice from the supplier. Keep all receipts — digital copies are fine. Good accounting software makes this almost effortless if you connect your bank account and categorise transactions as they come in.
When you're calculating your minimum freelance rate, GST doesn't factor into the base calculation. Your rate is what you need to cover super, tax, expenses, and unpaid time. GST sits on top of that rate and flows straight through to the ATO.
Where it gets confusing is when comparing rates. If someone quotes you "$110/hr" and another quotes "$121/hr including GST" — they're quoting the same base rate. Always compare net-of-GST figures when assessing what the market pays.
Once you hit $75,000 you have 21 days to register. Many freelancers only discover this at tax time — by which point they may owe months of GST they never collected, payable from their own earnings. Monitor your turnover regularly, especially if your income is growing quickly.
Quoting an all-inclusive rate instead of a base rate plus GST means you're subsidising your clients' tax obligations. On a $100/hr rate that's $9.09/hr you're effectively giving away. Over a full year that's thousands of dollars.
You can only claim input tax credits if you hold a valid tax invoice. Missing receipts mean missing credits. Set up a simple system — even just a dedicated email folder and a monthly habit of photographing physical receipts — to keep everything.
As described above: the GST component of your income is not yours. Mixing it with your operating account creates cash flow problems when BAS is due. Separate it immediately.
Your GST sits on top of your rate — use our calculator to find the base rate that genuinely replaces your income first.
Calculate my rateGenerally no. Exports of services to overseas clients are typically GST-free, meaning you don't charge GST on those invoices. However, the rules depend on the nature of the service and where it's consumed. If you have significant overseas clients, confirm the treatment with your accountant — the rules for digital services in particular have become more nuanced.
It doesn't matter — you still charge GST if you're registered. Individual consumers, small businesses under the threshold, and non-profits may not be GST-registered, but that's their situation to manage. You simply invoice your normal rate plus GST and they pay the full amount.
Yes. If your turnover falls below $75,000 and you believe it will stay there, you can cancel your GST registration through ATO Online Services. However, think carefully before doing so — if your income is variable, you may find yourself needing to re-register again soon, which creates more admin.
With good accounting software and organised records, quarterly BAS preparation typically takes 1–2 hours. If you've been tracking income and expenses throughout the quarter using software connected to your bank account, it's largely a matter of reviewing the pre-populated figures and hitting submit. Without software, expect 3–4 hours of reconciliation.
The ATO charges a failure-to-lodge penalty of one penalty unit (currently $313) per 28-day period the BAS is overdue, up to a maximum of five periods. Interest is also charged on any unpaid amount. If you're going to miss a deadline, contact the ATO or your tax agent beforehand — they're more accommodating of proactive communication than silence.