To be or not to be… GST registered are a lot theories around about whether you should be GST registered or not.  My advice, if you don’t have to be, then don’t be.  And you do not need to be unless you have or are going to be turning over $60k in any 12 month period. (BTW It doesn’t necessarily make you more ‘professional’ to be registered.)
Being GST registered means a whole lot more compliance for your small business.  Hence the above advise.
If you are or are considering being GST registered, then you need to consider the following:
You will either need to add GST into the selling price of your product or service, or lose a potential 15% of your income to the tax department.  It may mean getting some GST back when you purchase things, but in the long run your will be paying more GST out than you are claiming.  It may mean the costs of your products increasing.
If you are considering becoming GST registered, make sure you get some professional advice around your reasons, your structure may need to be looked at, and you will need to ensure you understand your obligations around filing your GST returns and paying your GST on time.


If you are registered for GST then the default option for the GST period is 2 monthly cycle. As mentioned above, if your turnover is greater than $60,000 then you have a 2 monthly cycle. If turnover is not greater than $500,000 then you can have the option to change to 6 monthly cycle. If your turnover is greater than $24 million then you can change to 1 monthly cycle.


The way you account for GST, i.e., how you claim and charge GST, is called your “accounting basis”. You need to choose the accounting basis that best suits your business.
There are three options if your turnover is under $2 million:

  • payments basis
  • invoice basis
  • hybrid basis.

The most commonly used method is the payments basis.
If your turnover is over $2 million you only have two options:

  • invoice basis
  • hybrid basis.

On the payment basis GST is filed when you receive the money in your hand (or bank account) and when you actually pay for goods.  On Invoice basis your GST is filed when an invoice is generated or the date of the invoice for payment.  There is also a hybrid method which is not used a lot at all.  This is  a combination of the above two, where income is filed on invoice basis, and purchases are filed on payments basis.


If you keep good records, your GST return completion will be easy. A good record keeping system helps you to:

  • keep track of how much money is coming in
  • how much money you’re spending
  • prepare your cash flow budget of future income and expenses
  • complete your GST return.

You should keep copies of all:

  • tax invoices you’ve sent out for payment
  • tax invoices or receipts for items you purchased, e.g. petrol and power
  • till and EFTPOS tapes.

If you would like to talk about anything in this article, feel free to touch base with us.

DiCE <3

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