Tax tips, do i need to charge gst, ato, gst, small business, startups

When starting out, one of the big decisions you’ll have to make is how to price your product or service. You’ll look at costings and competitors pricing coupled with other branding and marketing considerations to make this decision. One mistake we often see though is businesses not factoring GST into their pricing which leads to the question, ‘Do I need to charge GST?’.

Once your business is registered for GST (and the product or service you are selling attracts GST), you need to add 10% to your selling price. As your pricing must include 10% GST, it’s another price point which you need to be aware of. And when it comes to raising money on Pozible and Kickstarter, remember the same rules apply.

Have you looked at the rules around registering for GST? You can read more here.

Do I need to charge GST?

The goods and services you sell in Australia are generally taxable (which means you must include GST), unless they are “GST-free” or “input-taxed” sales. So pretty much, you are required to include GST on your invoices unless they are sales which are “GST-free” or “input-taxed” .

(1) GST-free sales
If the sales you make are GST free, you do not need to charge GST on your invoices. GST free sales can come about as a result of sales in the areas of health, education and food sales. It can also include goods or services exported overseas.

(2) Input-taxed sales
Similarly, if the sales you make are input-taxed you do not need to charge GST. Most input-taxed sales relate to selling financial supplies such as lending money.

This Tax Tips Tuesday is brought to you with love by Nudge Accounting. You can read other Tax Tips here.