Do you need to charge GST?
Before adding GST to an invoice, you need to know whether you are required — or permitted — to do so.
You must register for GST if:
- Your GST turnover (gross income from all sales) is $75,000 or more in a financial year
- You are a taxi or ride-share driver (the threshold is $0 for these businesses)
- You wish to claim fuel tax credits
You can voluntarily register for GST if your turnover is below $75,000. Some businesses do this to claim input tax credits on their own purchases, or because clients expect GST invoices.
If you are not registered for GST: Do not add GST to your invoices. If you add GST without being registered, you are not entitled to keep it and would need to remit it to the ATO — even if you have already spent it. You also cannot claim input tax credits on your purchases.
If you are unsure whether you need to register, check the ATO’s guidance or speak with a registered tax agent.
The GST rate in Australia
GST in Australia is a flat rate of 10%. It applies to most goods and services sold in Australia. Some supplies are GST-free (such as basic food, most health and medical services, and some exports) and some are input-taxed (such as residential rent and financial services).
If your goods or services fall into a GST-free or input-taxed category, you do not charge GST on them, but you may still need to issue a tax invoice showing that the supply is GST-free.
Two ways to work with GST
Method 1: GST-exclusive pricing (add GST on top)
You set your prices without GST, then add 10% when invoicing.
Example:
- Your rate: $200.00 per hour (excluding GST)
- 3 hours of work: $600.00
- GST (10%): $60.00
- Total payable: $660.00
Formula: Subtotal × 0.10 = GST amount. Subtotal + GST = Total.
This is common in B2B (business-to-business) settings where your clients are also registered for GST and will be claiming it back.
Method 2: GST-inclusive pricing (extract GST for the invoice)
You quote or advertise GST-inclusive prices. On the invoice, you need to show what portion of the total is GST.
Example:
- Quoted price (including GST): $660.00
- GST portion: $60.00 (calculated as $660 ÷ 11)
- Subtotal (excluding GST): $600.00
Formula: GST-inclusive total ÷ 11 = GST component. Total − GST = Subtotal.
This is common in B2C (business-to-consumer) settings where you display prices inclusive of GST.
What to show on the invoice
Your tax invoice should display:
- The subtotal (amount before GST)
- A separate GST line showing the GST amount
- The total (amount including GST)
This is the standard layout expected by Australian businesses receiving tax invoices. It lets them see exactly how much GST they have paid — which they need to claim input tax credits.
Example invoice totals section:
| Subtotal | $900.00 |
| GST (10%) | $90.00 |
| Total | $990.00 |
Alternatively, you can show a statement such as “Total price of $990.00 includes GST of $90.00” — the ATO accepts either format. The separate line format is more widely expected and easier for clients to process.
Rounding GST on invoices
When you have multiple line items, round the GST at the invoice total level — not on each individual line. This avoids rounding differences that can make your totals not add up correctly.
Correct approach:
- Sum all line items to get the subtotal
- Multiply the subtotal by 0.10 to get the total GST amount
- Round the GST to the nearest cent
- Add to the subtotal to get the total
Rounding convention: Round half-cents up (standard AUS practice). For example, $45.005 rounds to $45.01.
GST on different types of line items
If an invoice contains both standard-rated and GST-free items, you need to handle them separately:
- List GST-free items and indicate they are GST-free
- Apply 10% GST to taxable items only
- Show the GST component as a separate line covering only the taxable items
This is less common for most small businesses but relevant if you supply a mix of goods or services that attract different GST treatment.
When not to add GST
Do not include a GST line on your invoice if:
- You are not registered for GST
- The specific supply is GST-free (fresh food, most exports, basic health services, etc.)
- The specific supply is input-taxed (residential rent, most financial services)
In these cases, your invoice should show the total amount without a GST component. You may note “GST not applicable” or “GST-free supply” if you want to be explicit, but this is not legally required on the invoice itself.
Automating GST on invoices
Calculating GST by hand introduces room for error — missed items, rounding mistakes or incorrect totals. Invoicing software handles the maths automatically.
In InvoiceSent, you configure your GST rate once (10% for most Australian businesses). When you add line items to an invoice, the subtotal, GST amount and total are calculated and displayed as you go. You can review the totals before sending, and the invoice is formatted in the standard layout your clients expect.
Last reviewed: July 2026