GST (Goods and Services Tax) is a 10% tax you add to your prices and pass on to the tax office, and you’re generally required to register for it once your business turnover reaches the registration threshold. For a sole trader tradie, understanding the basics keeps you compliant and stops GST becoming a nasty surprise. (This is general information, not tax advice — check with your accountant for your situation.)
When you have to register
You’re generally required to register for GST once your annual turnover hits the registration threshold set by the tax office. Below that, registration is optional. Many growing tradies cross the threshold without realising, so it’s worth keeping an eye on your turnover as you scale — registering late can create problems.
What GST means day to day
Once registered, you add GST to your prices, show it on your tax invoices, and periodically pay the collected GST to the tax office (usually via a BAS). You can also claim back the GST you paid on business purchases. In effect, you’re collecting the tax on the government’s behalf and passing on the difference.
Why your invoices change
A GST-registered tradie issues tax invoices that clearly show the GST component. Your invoicing needs to handle this correctly — showing prices and GST properly — or you risk issuing invalid tax invoices. Getting the invoice format right is part of being registered.
Set money aside as you go
The GST you collect isn’t your money — it belongs to the tax office. Treating it as income and spending it is how tradies get caught short at BAS time. Setting the GST portion aside as it comes in means the bill is already covered when it’s due.
Keep it simple with the right system
GST becomes a headache when your records are messy. When your invoicing handles GST correctly and your income is tracked cleanly, working out what you owe is straightforward. TradieO handles GST on your invoices and keeps your numbers straight, so BAS time is a report, not a reconstruction.
Frequently asked questions
Do I have to register for GST as a sole trader?
Only once you reach the registration threshold — below that it’s optional. Check the current threshold and your turnover, and talk to your accountant.
Can I claim GST back on tools and materials?
Registered businesses can generally claim back the GST paid on business purchases. Keep your receipts and records.
Is this tax advice?
No — this is general information. Your accountant can advise on your specific circumstances, and you should confirm current thresholds and rules with them or the tax office.