GST for Australian Tradies — What You Need to Know About Tax, BAS, and the ATO

GST. Every tradie has to deal with it once they crack that $75,000 threshold — and even plenty of tradies under it choose to register anyway. But ask most blokes on the tools what GST actually means for their day-to-day business and you'll get a shrug, a vague "the government takes 10%," and maybe a story about the BAS form they put off until the night before it was due.

Here's the thing — GST isn't complicated. It's just one of those things nobody sat down and explained properly. So let's fix that.

GST stands for Goods and Services Tax. It's a 10% tax on most goods and services sold in Australia. When you send an invoice for $1,100, $100 of that is GST — the other $1,000 is your revenue. You're collecting that $100 on behalf of the ATO.

But here's the part that trips tradies up — you also get to claim back the GST you pay on stuff you buy for your business. Materials, tools, fuel, van repairs, new drills, that $800 battery charger that died after three months (yes, even that) — if you've paid GST on it and it's for your business, you can claim it back.

The difference between what you collect and what you pay out is what you send to the ATO. Simple in theory. Messy in practice if you don't keep good records.

If your annual turnover hits $75,000 or more, you must register for GST. No choice. If you're under that threshold, you can register voluntarily — and a lot of tradies do, because it lets them claim back the GST on their tools and materials, which is a big deal when you're spending $2,000 a week at the trade counter.

Most stuff attracts GST. But there are a few common pitfalls tradies hit:

Fuel — petrol and diesel include GST, but some agricultural and off-road fuel doesn't. If you're running a bobcat or excavator, check what you're paying.

Fresh food — irrelevant for trade businesses unless you're running a lunch run and trying to claim it.

Residential rent — rental properties are input-taxed, meaning the landlord can't claim GST on the rent, and you as a tradie don't pay GST on it either.

Housing construction — new residential builds are GST-free for the sale, but the materials and labour along the way still attract it. This is where it gets messy for builders.

The Business Activity Statement (BAS) is the form you lodge to tell the ATO how much GST you collected, how much you can claim back, and what the difference is. You can lodge monthly, quarterly, or annually. Most small trade businesses go quarterly because it's less admin.

Here's what you need for a clean BAS:

Sales records — every invoice you sent that includes GST. Total them up. That's your GST collected.

Purchase records — every receipt where you paid GST for business stuff. Total them up. That's your GST you can claim.

The difference — if you collected more than you spent, you pay the ATO the difference. If you spent more than you collected (rare for most tradies, but happens when you gear up for a big job), the ATO owes you.

Mixing personal and business purchases

Forgetting about the GST-free supplies

Not issuing tax invoices

The cash jobs trap

If you do commercial construction, fit-outs, or new residential builds for developers, you need to know about the residential/non-residential distinction. New residential property sales are input-taxed — the developer doesn't charge GST on the sale but can't claim input credits on the construction costs. If you're doing work for a developer on new residential builds, it's a reverse charge situation (the "margin scheme" and "GST-free residential premises" are their problem, not yours). You charge GST as normal on your invoices.

If you're doing commercial fit-outs — retail shops, offices, warehouses — it's the standard GST system. Nothing special. Just make sure your client is registered and wants a proper tax invoice.

You sent an invoice in May. Client hasn't paid yet. It's now July and your BAS is due. Do you still report the GST?

Yes. GST is accounted for on an invoice basis unless you've specifically elected for a cash basis. That means when you issue the invoice, not when you get paid. If you're a smaller operation getting stiffed on payments a lot, consider electing for the cash basis — you only report GST when the money hits your account. It's not automatic. You need to tell the ATO.

If you're reading this in June, your EOFY is here. GST-wise, here's your checklist:

Get your records straight — every invoice sent, every receipt kept. If you've been slack, spend a Sunday afternoon sorting it. Trade Track makes this painless — all your quotes converted to jobs, jobs converted to invoices, GST calculated automatically. But if you're still on spreadsheets or paper dockets, now's the time to get organised.

Check your PAYG instalments — if the ATO has set your instalments way below what you actually owe, you'll cop a bigger bill when you lodge. You can vary your instalments to match reality.

Review your GST basis — are you on invoice or cash basis? If you've got a pile of unpaid invoices from June and you're on invoice basis, you're paying GST on money you haven't received yet. Talk to your accountant about switching.

Set up for next year — if you're consistently paying more in GST than you expected, talk to an accountant about whether quarterly or monthly BAS works better for your cash flow.

GST isn't a punishment — it's a system that works well if you run your business properly. The tradies who get in trouble with GST are the ones running their business on vibes and receipts stuffed in a glovebox. The ones who use proper job management software, track everything, and treat the GST component of every payment as money that isn't theirs to spend — those are the ones who never think twice about BAS time.

Trade Track helps Australian tradies manage quotes, jobs, invoices, and GST from one platform — so your numbers are right every time, not just when the ATO comes knocking. No credit card required · 7-day free trial