Do Tradies Charge GST? Registering, Quoting and Invoicing

A tradie prices a bathroom at $4,000 and has to decide whether GST goes on top. A subbie opens a builder’s remittance with GST all over it when their own invoice had none. Both questions have one answer, and it has nothing to do with who the customer is.

Tradies charge GST for exactly one reason: they are registered for it. Not registered, no GST, on any job, ever.

What costs money is the gap in between. GST liability attaches to being required to register, not to having got around to it. Cross $75,000 in March, register in September, and the ATO’s position is that one eleventh of every job you invoiced in between belongs to them, whether or not you ever charged it. On $75,000 of work that is $6,818 out of your own margin, billed to customers who are long gone.

This guide covers when you have to charge GST, how to put it in a quote, what goes on the invoice, and what to write when you are not registered.

When tradies charge GST, and when they can’t

If you are registered, every job you do in Australia carries GST at 10%, sitting inside the price. If you are not registered, no job does, and you cannot add it. There is no sliding scale, no per-customer choice, and no charging it on the commercial work and leaving it off the cash jobs.

The ATO puts it in one sentence on its page on when to charge GST: “If you are registered for GST - or required to be - the goods and services you sell in Australia are taxable unless they are GST-free or input taxed.”

Four words there do all the damage. Or required to be means the liability follows the obligation, not the paperwork. A tradie who passed the threshold in March and registered in September does not start owing GST in September. They owed it from March, on work they priced and invoiced without it.

Nothing a plumber, sparky, chippy or landscaper sells gets you out of it either. The GST-free list is basic food, some medical and some education. Trade work is not on it, so the only question is your registration status.

GST is one of three things that change as a tradie’s business grows, alongside the structure you trade under and what you can claim. Our guide for tradies covers the set.

When a tradie crosses the line

Registration becomes compulsory at $75,000 of GST turnover. Turnover is gross business income, not profit, and the test is not the financial year. It rolls monthly, and it runs in two directions: what you have invoiced over the last twelve months, and what you expect to invoice over the next twelve. Hit $75,000 on either and you have 21 days to register.

In tradie arithmetic, $75,000 is about $1,440 a week of invoiced work. Bill 35 hours a week at $85 an hour and you are there in a bit over six months. Registration tends to arrive earlier than people plan for, because the twelve months being tested do not line up with the financial year.

There is one release valve worth knowing. A strong twelve months behind you does not force you to register if the next twelve will be under the threshold. That matters for anyone who had one big year on a single job and has gone back to normal work since. The mechanics of both tests, and what the ATO excludes from each, are in our guide to the GST registration threshold.

Quoting a homeowner and quoting a builder are different jobs

This is the part almost nobody gets told, and the rule does not come from tax law at all. It comes from consumer law, and it binds whether or not you are registered for GST.

Quote a homeowner and the price has to be one total figure with GST already in it. The ACCC’s rule on displaying prices is that businesses “must display the total price of a product or service as a single figure”, being the lowest amount a customer could pay including any taxes. So a domestic bathroom quote reads $4,400, not $4,000 plus GST.

Quote a builder or another business and you can write it either way. The same ACCC guidance carves them out: a business displaying prices only to other businesses does not need to include GST in the total. Plus GST is what a builder expects, because they claim the GST back and your ex-GST figure is the number they are comparing.

If you do show a consumer an ex-GST figure, the total has to be at least as prominent as the partial price. A quote with $4,000 across the top and “incl. GST $4,400” in six point at the bottom is the version that gets a business into trouble.

The practical fix is to keep two quote templates and stop trying to make one serve both. It also gives you something useful to say at the kitchen table. To a registered builder your price is the ex-GST number, because the GST washes out on their next activity statement. To a homeowner it is the whole number. The same job genuinely is 10% dearer to one of them and not the other.

What has to be on the invoice

A tax invoice is a specific document with a defined list of contents, not just an invoice from someone who charges GST. The ATO’s tax invoice rules set out seven details for any taxable sale under $1,000.

• That the document is intended to be a tax invoice
• Your identity
• Your ABN
• The date the invoice was issued
• A description of what you sold, including quantity where it applies and the price
• The GST amount payable
• The extent to which each sale on the invoice is a taxable sale

The last two look like they need a GST column and a tax code against every line. They do not. Where the GST is exactly one eleventh of the total, the ATO accepts one sentence covering both: “Total price includes GST”. For a tradie invoicing a single job at a single rate, that sentence is the whole compliance job.

A PDF emailed to the customer is a tax invoice. Paper has not been required for years, and neither has any particular software.

Jobs of $1,000 or more

One extra field. A tax invoice for a sale of $1,000 or more also has to show the buyer’s identity or their ABN. Since an invoice built to the higher standard is valid for smaller sales too, the simplest approach is to put the customer’s name and ABN field on every template and never think about it again.

When the builder writes your invoice for you

Plenty of subbies never issue an invoice at all. The builder’s system generates one and pays against it. That is a recipient-created tax invoice, it is legitimate, and it comes with conditions most subbies have never been shown.

Four things have to hold:

• You and the builder are both registered for GST at the time the invoice is issued.
• You have agreed in writing that they will issue it and you will not.
• That agreement is current and effective when they issue it.
• The type of work is covered by the Commissioner’s Recipient Created Tax Invoice Determination 2023.

A valid one shows that it is a recipient-created tax invoice rather than a standard one, carries both ABNs, and where GST is payable shows that it is payable by you as the supplier. The builder has to get you the original or a copy within 28 days of the sale or of working out what it is worth.

The failure mode bites the subbie. If your GST registration lapses, the builder has to stop issuing them, and the GST credits they claimed in the meantime are not valid. The ATO expects them to check your status on ABN Lookup before the first one and periodically after that. Worth confirming your own ABN Lookup entry still says you are registered, because the person who usually notices otherwise is the builder’s bookkeeper, and what they do about it is hold the GST off your next payment.

When someone asks you for one

Give them a tax invoice within 28 days of the request, unless the job came to $82.50 including GST or less. Keep your copy for five years, the general record-keeping period for business.

Not registered? What your invoice must not say

Plenty of tradies are under the threshold, particularly in the first year or two. The rules for an invoice with no GST on it are just as specific as the ones for a tax invoice.

No GST line. No 10% added anywhere. No “incl. GST” in the footer of a template you copied off someone.

Do not head it Tax invoice either. A tax invoice is a GST document. Calling an invoice with no GST on it a tax invoice is the error that gets picked up by the first bookkeeper who tries to claim a credit against it, and it makes you look like you have charged GST you never remitted. Call it an Invoice and move on.

Your ABN still belongs on it. Leave the ABN off and a business paying you more than $75 excluding GST is required to withhold tax from the payment at the top rate and send it to the ATO. That is the fastest way to be paid a fraction of what you invoiced while you wait until the end of the year to get the rest back.

If you have already charged GST while unregistered, the money was never yours. Tell the customer, refund the GST portion and reissue the invoice. It is an awkward phone call and a much smaller problem than the alternative.

One thing worth separating out: being unregistered is about your turnover, nothing else. Whether the builder is right to treat you as a contractor rather than an employee is a different question with a different answer, and it turns on how you actually work rather than on what either of you has registered for.

The GST you get back

Registration is not only a cost. From the day it takes effect you claim back the GST inside what you buy for the business: materials, tools, fuel, the ute, insurance, the accountant’s fee.

Registration is the gate. No registration, no credits, which is the whole argument for registering voluntarily when you are buying a vehicle or fitting out a van in your first year.

Four things have to be true for a credit, per the ATO’s rules on when you can claim a GST credit:

• You intend to use the purchase for the business.
• The price included GST.
• You have paid, or are liable to pay.
• You hold a tax invoice for anything over $82.50 including GST.

Under $82.50, a docket or a receipt does the job. If you cannot get either, a diary note works: the supplier’s name and ABN, the date, what you bought and what you paid.

Two things trip tradies up here. Private use apportions, so a ute at 60% business use gives you 60% of the GST, not all of it. And a credit is only valid if the supplier was actually registered, which takes ten seconds to check on ABN Lookup and is worth doing for any new subbie or supplier who starts adding GST to their invoices.

Where an invoice only says the price includes GST, divide it by 11 to get the credit. You have four years to claim one, running from the period you could first have claimed it.

Claiming GST back and claiming an income tax deduction are two separate claims off the same receipt, and they run on different rules. Our guide to tradie tax deductions covers the second one.

What lands after you register

A business activity statement, because registration is the trigger. Not turnover, not your structure. The ATO is unconditional about it: if you are registered for GST, you lodge a BAS.

Quarterly is the cycle for anyone with GST turnover under $20 million, which is every tradie. The four BAS due dates are 28 October, 28 February, 28 April and 28 July. Lodging online may get you an extra two weeks on three of them, though not on the December quarter, which already carries a one month extension.

The form is smaller than its reputation. Simpler BAS is the default under $10 million of GST turnover, which means three boxes: total sales, GST on sales, GST on purchases. Our explainer on what a BAS is covers what each label wants.

The habit that prevents the quarterly scramble is treating the GST as what it is. It was never your money. Move it out of the trading account the week it lands and the BAS becomes a lodgement rather than a cash flow event.

If you would rather not do them, our BAS lodgement service is $150 a quarter where the statement is GST only, $250 where it takes in payroll, fuel tax credits or instalment variations, and it is included in the $660 tradie package alongside the annual return.

Three GST moments tradies don’t see coming

1. Selling or trading the uteA sale of a business asset is a taxable sale like any other, and the ATO is explicit that you include GST when you trade in or dispose of a business asset by transferring ownership. The trade-in figure on your new ute has GST inside it.
2. Doing a job for a jobPayment does not have to be money. The sparky who wires your shed in exchange for you tiling their bathroom has made a taxable sale at market value, and so have you. Both sides report the GST, and neither side has any cash to pay it with.
3. A quiet yearTurnover falling back under $75,000 cancels nothing. The registration stays live until you cancel it, and a voluntary registration generally has to run twelve months. Until you cancel, every job still carries GST and every quarter still needs a BAS.

GST is not a tax on your business. It is money you collect on the ATO’s behalf and hold for a few weeks. Almost everything that goes wrong with it comes from treating it as income, or from starting late.