How do I work out the GST included in a price in Australia?

GST is 10% and is already baked into most Australian prices, so you find the GST by dividing the total by 11. For example, $110 divided by 11 is $10 of GST, because the GST is exactly one-eleventh of a GST-inclusive total.

Can I claim GST credits if I'm not registered for GST?

No — you can only claim GST credits if you're registered for GST. If you're a sole trader under the threshold and haven't registered, you simply pay the GST-inclusive price and can't claim the 10% back. The full expense may still be deductible on your income tax, which is a separate matter.

What details does a valid tax invoice need to show?

For purchases under $1,000, a tax invoice must show that it's intended to be a tax invoice, the seller's identity and ABN, the date issued, a brief description of what was bought, and the GST amount (either shown separately or a note that the price includes GST). For purchases of $1,000 or more, it also needs the buyer's identity or ABN. If your supplier hasn't given you one, you can ask, and they have 28 days to provide it.

GST on Business Expenses, Explained Simply

Q: Do I need a tax invoice to claim GST on a small purchase?

To claim a GST credit on a purchase costing more than $82.50 (including GST), you must hold a valid tax invoice. For purchases of $82.50 or less, a receipt is enough and you don't need a full tax invoice, though you should still keep proof.

Last updated 29 June 2026

GST trips up a lot of people running a small business in Australia, mostly because the word gets used loosely. You'll hear "I'll claim the GST back" and "I need to add GST to that" in the same breath, as if they're the same thing. They're not. Here's how GST actually works on the money you spend, in plain English, with no jargon you have to look up.

What GST actually is on a business purchase

GST is a 10% tax on most goods and services sold in Australia. The important bit for expenses: when you buy something from a GST-registered business, the GST is already baked into the price you pay. It's GST-inclusive. A $110 tool from the hardware store isn't $110 plus GST — that $110 is made up of $100 for the tool and $10 of GST.

The quick way to find the GST inside a price is to divide the total by 11. So $110 ÷ 11 = $10 of GST. That one piece of mental arithmetic will get you a long way.

You pay GST on almost everything, whether or not you run a business. What changes when you're in business is whether you can get some of it back.

Claiming GST credits — only if you're registered

That $10 of GST you paid on the tool can come back to you as a GST credit (the ATO also calls it an input tax credit) — but only if a few things are true:

You're registered for GST. No registration, no credits. This is the big one. If you're a sole trader under the turnover threshold and haven't registered, you simply pay the GST-inclusive price and that's the end of it. You can't claim the 10% back, though the full expense may still be deductible on your income tax — that's a separate thing covered in the pillar guide on tracking business expenses.
The purchase is for your business, not private use. If something is part business and part personal — say a phone you use for both — you only claim the business portion.
It's not a GST-free or input-taxed purchase. Most basic food, some health and education, and a few other things don't carry GST, so there's nothing to claim.

Get those right and your GST credits reduce what you owe the ATO. More on that below.

You need a valid tax invoice

Here's the rule that catches people out at BAS time. To claim a GST credit on a purchase that costs more than $82.50 (including GST), you must hold a valid tax invoice. For purchases of $82.50 or less, a receipt is enough — you don't need a full tax invoice, though you should still keep proof.

So what makes an invoice a tax invoice? For purchases under $1,000, the ATO says it needs to show enough to clearly work out these details:

that the document is intended to be a tax invoice
the seller's identity and their ABN
the date it was issued
a brief description of what was bought
the GST amount — either shown separately, or a line saying the total price includes GST (valid when the GST is exactly one-eleventh of the total)

For purchases of $1,000 or more, the invoice also needs to show the buyer's identity or ABN. If your supplier hasn't given you a tax invoice, you can ask for one — they have 28 days to provide it, and it's worth waiting for that before you claim, rather than guessing.

This is exactly why a tidy capture habit matters. A faded thermal receipt that's lost its merchant name or ABN isn't much use as a tax invoice. Snapceipt reads the merchant, date, total and GST off a photo and keeps the image, so the proof and the figure live together. There's more on building that habit in keeping records as a sole trader.

When you actually have to register for GST

You must register for GST once your business has a GST turnover of $75,000 or more (it's $150,000 for non-profits). Turnover here means your gross income from sales, not your profit. You also need to register within 21 days of reaching that threshold — and you'll need an ABN first.

Under $75,000 it's optional. Some sole traders register voluntarily so they can claim GST credits on big start-up purchases; others stay unregistered to keep their prices simpler and their paperwork lighter. There's no single right answer — it depends on who your customers are and what you spend. If you're close to the threshold, keep an eye on your rolling figures, because the 21-day clock is unforgiving and the ATO can make you pay GST on past sales if you register late.

How it flows into your BAS

If you're registered, GST is settled through your Business Activity Statement (BAS). The maths is simpler than it sounds: you add up the GST you collected on your sales, subtract the GST credits from your purchases, and the difference is what you pay the ATO (or get refunded if your credits are larger).

On a Simpler BAS that's three boxes — G1 for your total sales, 1A for the GST you collected, and 1B for the GST credits you're claiming. Every valid tax invoice you've kept is a few dollars going into that 1B box and staying in your pocket. Which is the whole reason to bother capturing them properly through the year, rather than scrambling through a shoebox the week BAS is due.

Get the habit right and GST stops being a mystery: pay the inclusive price, keep the tax invoice, claim the credit, lodge the BAS. That's the entire loop.