GST and BAS for Sole Traders: The No-BS Guide (2026)

GST and BAS trip up more sole traders than any other compliance area. Here’s everything you need to know, explained plainly — no accountant jargon.

Do you have to register for GST?

You must register for GST if your business has a GST turnover (gross income) of $75,000 or more in a 12-month period, or if you expect to exceed this threshold. For ride-share and taxi drivers, registration is mandatory from the first dollar.

If you’re under $75,000, registration is optional. Some tradies register voluntarily so they can claim back the GST on their purchases (input tax credits), which can be worthwhile if you spend heavily on materials and tools.

How GST works in practice

GST is 10% added on top of your price. If you quote a job at $1,000 excluding GST, the client pays $1,100 and you remit $100 to the ATO. You’re collecting the tax on the ATO’s behalf — it’s never your money to keep.

At the same time, you can claim back the GST you paid on your business expenses (input tax credits). If you spent $550 at Bunnings (which includes $50 GST), you claim that $50 back on your BAS.

Your net GST position is always: GST collected on sales minus GST paid on purchases. If you collected more than you paid, you remit the difference. If you paid more than you collected (common in slow months), you get a refund.

What must go on a tax invoice?

For any sale over $82.50 (including GST), you must issue a tax invoice. It must include:

• The words “Tax Invoice”
• Your business name and ABN
• Date of issue
• Description of the goods or services
• GST amount (or statement that the total includes GST)
• Total price including GST

What is a BAS?

A Business Activity Statement (BAS) is the form you lodge with the ATO to report and pay your GST. Most businesses lodge quarterly — for the periods ending 30 September, 31 December, 31 March, and 30 June. Lodgement is typically due 28 days after the end of each quarter.

If you use a registered BAS agent or tax agent, you may get extended deadlines.

What can you claim as a GST credit?

You can claim the GST back on business purchases used to make taxable sales. Common examples for tradies:

• Materials and supplies (timber, pipe, cable, tiles)
• Tools and equipment
• Vehicle costs (fuel, servicing, registration)
• Subcontractor invoices (if they charged GST)
• Software subscriptions (like Talk2Quote)
• Work clothing and PPE
• Phone and internet (business portion)

You cannot claim GST on wages (GST doesn’t apply to wages), personal expenses, or purchases from non-registered suppliers.

The cash vs accruals accounting method

You can account for GST on either a cash basis or accruals basis. For most sole traders and small businesses, cash basis is simpler — you report GST when money actually changes hands, not when invoices are issued. Cash basis is available to businesses with GST turnover under $10 million.

What happens if you don’t lodge?

Late or missing BAS lodgements result in a Failure to Lodge (FTL) penalty. The ATO can also estimate your liability and issue a default assessment — which is usually higher than your actual tax. Penalties are $222 per 28-day period late, up to a maximum of $1,110 for most small businesses. Unpaid GST also accrues General Interest Charge (GIC) at the ATO’s published rate.

This article is for general information purposes only. It does not constitute legal, financial, or professional advice. Talk2Quote recommends consulting a qualified accountant, bookkeeper, or employment lawyer for advice specific to your situation. Information is current as at April 2026 and may change.