Invoicing as an Australian sole trader who isn't registered for GST

The A$75,000 threshold, and how it is actually measured

You must register for GST once your GST turnover reaches A$75,000 (A$150,000 for a not-for-profit organisation). The test is not your last financial year's figure. It is a rolling twelve-month test looking at either the current month plus the previous eleven, or the current month plus the next eleven you reasonably expect. If either measure hits the threshold, you have crossed it, and you are generally required to register within 21 days of becoming aware of that.

A few activities require registration regardless of turnover — taxi and ride-sourcing drivers are the well-known example. If you claim fuel tax credits you also need to be registered.

Until you cross that line, registration is optional. Some sole traders register voluntarily in order to claim GST credits on equipment and expenses; whether that is worthwhile depends on whether your customers are GST-registered businesses (who don't care about the extra 10%) or consumers (who do). That is a conversation to have with an accountant.

Don't call it a tax invoice, and don't charge GST

If you are not registered, your document is an "Invoice", not a "Tax invoice". A tax invoice is the specific instrument a buyer uses to claim a GST credit; issuing one when you are not registered implies GST is recoverable when it is not, and the customer may later have to reverse the claim.

So: no GST line, no GST amount, no "includes GST" statement, and no 10% added to your prices. Your price is simply your price. It is good practice — though not strictly mandated — to add a short explicit line such as "No GST has been charged. This business is not registered for GST." That one sentence pre-empts most of the emails you would otherwise get from accounts departments.

Bear in mind you also cannot claim GST credits on your own purchases while unregistered. The GST you pay on supplies and equipment is simply part of the cost, and you claim the full GST-inclusive amount as a deduction in your income tax return instead.

Always quote your ABN: the no-ABN withholding rule

Here is the rule that catches people out. Where a business makes a payment to another business for goods or services and the supplier has not quoted an ABN on the invoice, the payer is generally required to withhold tax at the top rate and remit it to the ATO. That rate is currently 47% — the top marginal rate plus the Medicare levy — though you should confirm the current figure on ato.gov.au before relying on it.

You would eventually recover the withheld amount through your tax return, but in the meantime almost half your fee is sitting with the ATO instead of in your bank account. Quoting your ABN on every invoice avoids the situation entirely.

There are limited exceptions — for example, payments of A$75 or less excluding GST, and cases where the supplier gives the payer a completed "Statement by a supplier" form declaring that the activity is a hobby or private recreational pursuit, or that they are otherwise not entitled to an ABN. If you are running a genuine business, getting an ABN is free and far simpler than relying on exceptions.

What to put on the invoice

A workable non-GST sole trader invoice includes: the heading "Invoice"; your name or trading name; your ABN; your contact details; an invoice number; the date of issue; the customer's name; a description of the work with quantity or hours and the price; the total; a clear statement that no GST has been charged; and your payment terms and bank details.

Crossbill's "Australia — sole trader, not registered for GST" preset sets exactly this up: it removes the GST fields, keeps the heading as "Invoice", and keeps the ABN field prominent. Everything is generated in your browser, so the invoice data never leaves your device.

When you cross the threshold

Watch the rolling twelve-month figure rather than waiting for the end of the financial year. If you are required to be registered and you don't register, the ATO can backdate your registration — and you may then owe GST on sales where you never collected it, which comes out of your own margin.

From your registration date forward, your documents become tax invoices, you add 10% GST, and you start lodging business activity statements. Some sole traders raise their prices by 10% at that point; others absorb it. Either way, tell your regular customers before the first GST-bearing invoice arrives.

This is general information, not tax or legal advice. Thresholds, rates and withholding rules change — check the current position on ato.gov.au or speak to a registered tax agent about your circumstances.