GST core
GST turnover
GST turnover is the total value of your business sales, excluding GST and certain items such as input-taxed sales, which is used to decide whether you must register for GST.
GST turnover is the figure the ATO uses to decide whether your business is big enough to be required to register for GST. It is based on your gross business income, meaning your sales before costs are taken out, not your profit. Many small business owners are surprised that a business with low profit can still have to register because its turnover is high.
In general, GST turnover is the total of your sales that are, or would be, taxable or GST-free if you were registered, with GST left out. It includes sales of goods and services, GST-free sales and exports. It does not include sales that are input-taxed, such as financial supplies and residential rent, and it does not include sales of capital assets outside the ordinary course of business, or sales not made in carrying on your enterprise. It also takes account of the turnover of related entities in some cases, which matters for businesses operating through connected structures.
There are two common ways of measuring it. Current GST turnover looks at your total for the current month plus the previous 11 months. Projected GST turnover looks at your expected total for the current month plus the next 11 months. You compare each with the registration threshold, which is $75,000 for most businesses and $150,000 for non-profit organisations. If either test reaches the threshold, you are generally required to register.
Sales are counted on a basis that matches your reporting method, so it is important to be consistent. The figure is unaffected by how many customers you have or by whether you have been paid yet if you use the accrual method. Businesses using cash accounting generally count amounts as they are received.
The registration threshold test is separate from other turnover tests used in the tax system, such as aggregated turnover for small business concessions. They are calculated differently, so do not assume one number serves for all purposes. For example, the instant asset write-off and the small business entity rules use their own turnover definitions, set by legislation and updated from time to time.
A typical mistake is checking only last year's total instead of a rolling 12-month window. A business can cross the threshold in any month, so it is wise to review monthly. Another mistake is counting the GST itself, or counting sales that are outside the definition. Taxi and ride-sourcing drivers must register regardless of turnover.
This is general information. If your turnover is near the threshold, or your structure is complex, confirm your position with the ATO or a registered tax professional.
Worked example
Nina runs an online craft shop. Over the last 12 months, including the current month, she made $62,000 of sales excluding GST, plus $9,000 of exports, which are GST-free. She also received $4,000 of interest, which is not counted. Her current GST turnover is $62,000 plus $9,000, which is $71,000, so she is under the $75,000 threshold, but she should keep monitoring it each month.
Practical tips
- Check your turnover every month using a rolling 12-month window rather than only at the end of the financial year.
- Exclude GST itself and input-taxed items such as residential rent when you calculate it.
- Remember that GST-free sales and exports still count toward the threshold.