Should You Register for GST? The $75,000 Question for Freelancers

GST registration seems simple: you hit $75,000 in turnover, you register. But it's not that straightforward. You can register voluntarily at any income level, and depending on who your clients are and what you spend, there are genuine reasons to do it early. There are also genuine reasons not to.

When GST registration is mandatory

You must register for GST if:

• Your GST turnover is $75,000 or more in the current month, or
• You reasonably expect it will reach $75,000 in the next 12 months

GST turnover is your total business income (excluding GST itself, input-taxed sales, and sales not connected to Australia). For most freelancers, it's your total invoiced revenue.

Once you cross the threshold, you have 21 days to register. The ATO can backdate your registration and charge GST on sales you made after you should have registered, so don't delay.

What counts toward the $75,000?

All of your business income counts: invoiced freelance work, retainers, project fees, and anything else earned through your ABN.

What doesn't count:

• Salary from employment (PAYG income)
• Personal investment income
• Hobby income (if not run as a business)

If you have a part-time job paying $50,000 and freelance income of $60,000, only the $60,000 counts toward the GST threshold.

How GST works

GST is a flow-through tax. You collect it from clients and pass it to the ATO, minus the GST you've paid on your own business expenses. You're the middleman, not the one footing the bill.

The cycle:

1. You invoice a client $1,100 (including $100 GST)
2. You pay $110 for a software subscription (including $10 GST)
3. At BAS time, you report: $100 collected - $10 paid = $90 owed to ATO

The $100 you collected was never your money. And the $10 you paid on expenses gets refunded. You're just the middleman.

GST doesn't cost you money. It costs you time.

The GST you charge clients is passed through. The GST you pay on expenses is claimed back. The only real cost is the admin of tracking and reporting it. (For more on what you can claim, see our full list of freelancer tax deductions.)

The case for voluntary registration (below $75,000)

You can claim back GST on expenses

If you're not registered, you pay GST on everything (software, equipment, internet, phone) and absorb it. Once registered, you claim it back on your BAS.

The maths: If your business expenses are $15,000/year (inclusive of GST), you're paying about $1,364 in GST on those expenses. Register, and you get that back.

Whether this is meaningful depends on your expense level. A writer with a laptop and an internet connection has maybe $3,000 in annual expenses ($273 in GST). A developer paying for multiple SaaS tools, hosting, and equipment might have $20,000+ ($1,818 in GST). The more you spend, the more registration is worth.

You look more established

Some businesses and agencies prefer working with GST-registered suppliers. A tax invoice with a GST line looks more professional than a plain invoice. This is a soft benefit, but it's real, especially if you're targeting corporate or government clients.

You're approaching $75,000 anyway

If you're at $60,000 and growing, registering now avoids the scramble of backdating registration and adjusting invoices when you inevitably cross the threshold. Get the systems in place while things are calm.

The case against voluntary registration

Your clients are individuals or small businesses

If your clients are consumers (not GST-registered themselves), they can't claim back the GST you charge. Your services effectively become 10% more expensive to them. This matters if you're a freelance photographer shooting weddings, a personal trainer, or a tutor. Your clients eat the GST.

If your clients are businesses registered for GST, the extra 10% doesn't matter. They claim it back on their own BAS, so the client mix is what matters here. (More on how GST factors into your pricing in our guide to setting your freelance rate.)

Less admin and compliance

Being registered means:

• Charging GST on every invoice
• Issuing proper tax invoices (with specific required elements)
• Tracking GST on all business expenses
• Lodging quarterly BAS returns
• Paying the net GST each quarter

If your income is comfortably below $75,000 and your expenses are low, the time spent on GST compliance might not be worth the small GST refund on expenses.

Cash flow timing

When you invoice $11,000 (including $1,000 GST), that $1,000 isn't yours, but it sits in your account until BAS time. Some freelancers get used to having that cash available and get caught short when the BAS is due. Setting up a separate tax savings account solves this, but it's an extra system to maintain.

Decision framework

A practical framework for the decision:

How to register

GST registration is done through the ATO:

Your obligations once registered

Once you're in the system:

• Charge 10% GST on all taxable supplies (most of your freelance work)
• Issue tax invoices that include your ABN, the words "Tax Invoice," and the GST amount
• Lodge BAS quarterly (due on the 28th of the month after the quarter ends)
• Keep records of all GST collected and paid for 5 years
• Separate your GST money. When you receive $11,000, transfer $1,000 to a separate tax account immediately

Some supplies are GST-free (education, health, exports), but most freelance services are standard taxable supplies.

Frequently asked questions

Can I deregister if my income drops below $75,000?

Yes. Deregister through the ATO Business Portal if your turnover is below $75,000 and you don't expect it to climb back. You'll need to lodge a final BAS covering the period up to your deregistration date.

Do I charge GST to overseas clients?

Generally no. Services provided to overseas clients are usually GST-free exports. The supply must be made to a non-resident who is outside Australia when the service is performed. If you do significant international work, get specific advice. The rules around "connected with Australia" can be complex.

What if I'm right at the $75,000 boundary?

Make a judgment call. At $73,000 with two months to go, if another project would push you over, register now. "I'll just stop working to stay under" is not a strategy.

How does GST affect my pricing?

If your clients are businesses: add GST on top of your rate. They claim it back, so it doesn't change what they actually pay. If your clients are consumers: you might need to absorb the GST (lower your pre-GST rate) to keep prices competitive. This effectively reduces your income by about 9% on those sales. Our guide to setting your freelance rate covers how to factor GST into your pricing.

What's the penalty for not registering when I should?

The ATO can backdate your registration and assess GST on every sale you made since you should have registered. You'd owe that GST even if you never charged it to clients, which means it comes straight out of your pocket. There can also be additional penalties on top. Register on time.