How to Calculate GST on Invoices in Australia – Simple Guide

GST (Goods and Services Tax) is a fact of life for most Australian businesses. If you're a tradesperson, freelancer, or small service business, you need to know when to register for GST, how to add it to your invoices, and how to report it to the ATO. Getting it wrong can lead to penalties, incorrect pricing, or missed claims on business expenses. The good news is that GST calculation is straightforward once you understand the basics: 10% on most goods and services, with clear rules for when you need to issue a tax invoice and what to include. This guide covers GST registration thresholds, how to calculate GST on invoices, tax invoice requirements, and BAS reporting—so you can invoice correctly and stay compliant.

Do You Need to Register for GST?

Not every business must register for GST. It depends on your turnover.

Mandatory Registration

You must register for GST if your GST turnover is $75,000 or more in a 12-month period (or you expect it to reach that). GST turnover is your total business income, excluding GST, from taxable supplies. For most tradespeople and freelancers, that means your gross revenue before GST.

Voluntary Registration

You may register for GST even if your turnover is below $75,000. This can be useful if:

• You want to claim GST on business purchases (e.g., tools, materials, vehicles)
• Your clients expect to receive tax invoices so they can claim GST credits
• You're close to the threshold and want to avoid a sudden registration requirement

Once registered, you must charge GST on taxable supplies and lodge BAS (Business Activity Statements).

Exempt Supplies

Some supplies are GST-free (e.g., most health, education, and some food). If you only supply GST-free items, you generally don't need to register. Most trades and service businesses, however, supply taxable goods and services.

How to Calculate GST on Invoices

GST in Australia is 10%. You add it on top of your price (for GST-inclusive pricing) or calculate it from a GST-exclusive price.

GST-Exclusive Pricing (Most Common for B2B)

You quote a price excluding GST, then add 10% at the bottom.

Example:

Labour – 8 hours @ $65/hr                    $520.00
Materials – parts and fittings                $180.00
                                              --------
Subtotal                                     $700.00
GST (10%)                                     $70.00
                                              --------
Total (inc. GST)                             $770.00

Formula: GST = Subtotal × 0.10 (or Subtotal ÷ 10)

GST-Inclusive Pricing

The price already includes GST. To work out the GST component:

Formula: GST = Total ÷ 11

Example: Total $770 (inc. GST) → GST = $770 ÷ 11 = $70. The GST-exclusive amount is $700.

Quick Reference

Subtotal (excl. GST)	GST (10%)	Total (inc. GST)
$100	$10	$110
$500	$50	$550
$1,000	$100	$1,100
$2,450	$245	$2,695

Tax Invoice Requirements in Australia

If you're GST registered and the sale is over $82.50 (including GST), you must issue a tax invoice. A tax invoice must include:

• The words "Tax Invoice" (not just "Invoice")
• Your ABN
• Your name or business name and address
• The date of issue
• A description of the goods or services
• The quantity and price of each item (or the total if under $1,000)
• The GST amount (or a statement that the total includes GST)
• The total amount payable

If the sale is $82.50 or less, you can issue a simplified tax invoice with less detail (your ABN, a description, the total including GST, and a statement that GST is included).

When to Issue a Tax Invoice

Issue a tax invoice:

• At the time of sale – when you provide the goods or services
• Within 28 days – if the customer requests one

For ongoing work, you might issue invoices at milestones or at the end of the job. For guidance on invoice structure, see how to write an invoice as a sole trader.

BAS Reporting – What You Need to Know

Once registered for GST, you lodge a Business Activity Statement (BAS) to report and pay GST. The frequency depends on your turnover:

• Annual – turnover under $10 million, and you choose annual reporting
• Quarterly – most small businesses
• Monthly – turnover over $20 million (or you choose monthly)

On your BAS you report:

• GST on sales – GST you've collected from customers (you owe this to the ATO)
• GST on purchases – GST you've paid on business expenses (you can claim this back)
• Net GST – the difference (usually you pay the ATO; sometimes you receive a refund)

Keep records of all tax invoices you issue and receive. The ATO can ask to see them.

Common GST Scenarios for Tradespeople

Scenario 1: Labour and Materials

You do a job for $1,100 (GST inclusive). Your breakdown:

• Subtotal: $1,000
• GST: $100
• Total: $1,100

You owe $100 GST to the ATO for this sale (minus any GST you can claim on your purchases).

Scenario 2: Materials You Buy (GST Credits)

You buy $220 worth of materials (inc. GST) for a job. The GST you paid is $20. You can claim this as a GST credit on your BAS, reducing what you owe.

Scenario 3: Mixed Supplies

Some items might be GST-free. If you're unsure, check the ATO website or speak to an accountant. Most trade work (plumbing, electrical, building, etc.) is taxable.

GST and Quotes

When you give a quote, state whether the price includes or excludes GST. Common wording:

• "All prices exclude GST. GST will be added at 10%."
• "Total $1,100 (inc. GST)"

This avoids confusion when you convert the quote to an invoice. For more on quotes, see how to quote for a job and invoice vs quote.

Summary

GST in Australia is 10%. Register if your turnover is $75,000 or more (or voluntarily if it helps your business). Calculate GST by adding 10% to your GST-exclusive price, or use Total ÷ 11 to extract GST from an inclusive price. Issue a tax invoice for sales over $82.50 (inc. GST), including your ABN, a clear description, and the GST amount. Lodge your BAS to report GST on sales and claim GST on purchases. With these basics in place, you'll invoice correctly and stay compliant with the ATO.