When GST becomes part of the conversation
Many contractors need to consider GST registration once turnover reaches the registration threshold or when commercial clients expect tax invoices. Once registered, pricing should usually distinguish ex-GST and inc-GST amounts.
Quoting $1,100 including GST is different from quoting $1,100 plus GST. That difference can erase margin quickly.
You are required to register for GST once your GST turnover reaches $75,000, although some people choose to register earlier. Ride-sourcing drivers must register regardless of turnover. Registering early also keeps your income private, because clients cannot tell whether you turn over $1 or $100,000.
What BAS usually captures
A BAS commonly reports GST collected on sales, GST credits on business purchases, PAYG withholding and PAYG instalments depending on the business. Contractors with employees or regular instalments may have more obligations than a simple freelancer.
Creative contractors should be especially careful with agents, reimbursements, overseas clients and mixed taxable/GST-free income.
Cash-flow traps
GST collected is not your money to keep. Set it aside as invoices are paid, especially when project income arrives in large chunks followed by quiet months.
A separate tax account can reduce stress when quarterly BAS and income tax instalments arrive together.
How In The Picture can help
We help contractors and businesses review GST registration, prepare BAS lodgements, bookkeeping setup and the tax treatment of unusual income before it turns into deadline pressure.
