GST for Freelancers & Sole Traders: What to Charge & Claim
If you’re a freelancer or sole trader in Australia, chances are you’ve heard the term GST thrown around, usually in the context of invoices, expenses, or that dreaded quarterly BAS. But figuring out whether you need to register, when to start charging clients, or how to claim expenses can feel like decoding tax law in a foreign language. Here’s the thing: the rules around GST for freelancers in Australia are surprisingly clear once you know where you fall.
Whether you’re a graphic designer working from home, a social media consultant invoicing clients, or a sole trader running a small local service, your tax obligations change the moment your earnings pass a certain line. This guide is here to make it simple. We’ll walk you through when GST kicks in, what to include on your invoices, what you can claim back, and how different types of self-employed work, from creative gigs to rideshare driving, are treated under Australian tax law.
Do You Need to Register for GST?
If you’re freelancing or operating as a sole trader, your GST obligations depend on how much income you make, and in some cases, what kind of work you do.
The $75,000 Threshold
The Australian Taxation Office (ATO) requires any business, including sole traders, to register for GST once their annual turnover hits or exceeds $75,000. This is known as the sole trader GST threshold $75,000, and it applies to your gross income, not profit. So if you’re earning $6,300/month or more, it’s time to start paying attention.
You must register within 21 days of knowing your turnover will cross that threshold, not after it happens. That includes months when you land a big project or suddenly scale your freelance income.
Compulsory GST from Day One
Some freelancers have to register from the first dollar earned, regardless of turnover. For example, ride-share drivers must register for GST even if they make just $100 a week. That’s because their industry is classified differently under tax law, along with other transport-based services.
Voluntary RegistrationVoluntary Registration
If you’re earning under $75,000, you can still choose to register for GST. Some freelancers do this to claim back GST on business expenses, or to appear more professional to larger clients. But be careful, once you register, you’re expected to follow all GST reporting rules, even if you’re under the threshold.
When to Charge GST on Invoices
Once you’re registered for GST, whether because you crossed the threshold or chose to register voluntarily, the rules are simple: you must charge GST on all taxable goods and services you provide. For freelancers, this usually means adding 10% GST to your invoices and itemizing it so clients know exactly what they’re paying for. Let’s break it down:
You're Registered? Then You Charge
As soon as you’re registered, even if you haven’t crossed $75,000 yet, the ATO expects you to issue tax invoices that include GST. This applies to all your local Australian clients. For international clients, GST doesn’t usually apply, but it’s still important to issue proper invoices.
So, when freelancers charge GST on invoices, it’s directly tied to their GST registration status, not client type or project size. No registration? No GST. Registered? Then GST must appear on every bill.
What Should Be on Your Invoice?
A tax invoice should include:
- Your ABN
- The phrase “Tax Invoice”
- Your business name and contact details
- A clear breakdown of the total amount + GST
- The date of issue
Failing to charge GST correctly, or forgetting to include it, can result in underreported income and issues when lodging your Business Activity Statement (BAS).
Claiming GST Credits as a Sole Trader
One of the biggest perks of being registered for GST is the ability to claim back the GST you’ve paid on business-related purchases. These are called GST credits, and they can seriously reduce how much tax you owe. If you’re a sole trader who regularly spends on tools, subscriptions, travel, or equipment for your business, you could be leaving money on the table by not tracking and claiming those credits.
What Can You Claim?
You can generally claim GST credits on any purchase that’s:
- Directly related to earning your income
- From a registered Australian business that charged GST
- Documented with a valid tax invoice
Common claimable expenses include:
- Laptops, phones, or microphones used for work
- Online tools like Canva, Zoom, or Adobe subscriptions
- Business travel costs (taxis, flights, accommodation)
- Home office equipment (chairs, desks, etc.)
Conclusion:
Freelancers and sole traders are the backbone of Australia’s flexible workforce, but with that freedom comes responsibility, especially when it comes to GST. If your annual income hits the $75,000 threshold, or you work in certain industries like ride-share, then GST registration isn’t optional; it’s mandatory. You’ll need to charge GST on your invoices, lodge regular BAS statements, and keep track of business expenses to claim credits properly. Understanding GST for freelancers in Australia isn’t just about ticking boxes; it’s about staying in control of your money, building trust with clients, and avoiding nasty surprises at tax time. Whether you’re a designer, tradie, consultant, or Uber driver, having a clear system in place and using tools like a GST calculator can save you time, money, and stress.
Frequently Asked Questions(FAQs)
Do freelancers need to register for GST in Australia?
Yes, if your annual turnover hits $75,000 or more, you’re legally required to register for GST. However, some freelancers voluntarily register earlier to claim GST credits or look more professional.
What is the GST threshold for sole traders?
The sole trader GST threshold is $75,000 per year. Once your gross income crosses this amount, you must register for GST within 21 days.
How do I know when to start charging GST on invoices?
You start charging 10% GST once you’re registered, whether due to crossing the threshold or choosing to register voluntarily. Always include the GST amount clearly on your tax invoices.
Can I claim GST on my business expenses as a freelancer?
Yes, if you’re registered for GST, you can claim credits on eligible business purchases like software subscriptions, equipment, or travel. Just make sure you have valid tax invoices.
Do Uber drivers need to register for GST?
Absolutely. Ride-share drivers must register for GST from day one, even if they earn under $75,000. The ATO classifies ride-share services as taxi travel, which has stricter rules.