How does GST work for freelancers?

Article by Emma Warren

One of the most difficult aspects of freelancing or kicking off a small business is understanding your financial and tax requirements. Unless your field of freelancing is finance, you will probably feel overwhelmed when you recognise the various rules and regulations that apply to you. 


You’re just trying to make a living after all – why does it have to be so flippin’ hard?


Goods and Services Tax (GST) is one of the many laws that you will soon become familiar with as you start making money as sole trader. 


If you don’t adhere to the rules surrounding GST, you will face some serious penalties. The ATO will have no trouble finding you if you are earning above the set thresholds and not paying GST. (So don’t even think about trying to fly under the radar!)

What is GST?

GST is a 10% tax applicable for all goods and services sold in Australia. The tax is paid to the Australian Tax Office (ATO). There are some industry-specific rules that apply for different types of business in Australia, so it is best to do research on the ATO website to see what rules apply to you. 


As a freelancer, you only need to charge GST if you earn more than $75,000 annually. If you earn less, you needn’t worry about GST. However, once you earn above the amount, you need to give 10% of your sales to the ATO.

What do you need to do to charge GST?

As a freelancer charging GST, you will need an Australian Business Number (ABN) and be registered for GST with the ATO. Regardless of whether you do or do not earn above the $75,000 threshold, you can still register for GST and be prepared in case you exceed this number.


The most popular and sensible way to charge GST to your customers is by adding a 10% cost onto their payable invoice. This cost should be noted separately from the price of the good or service they are purchasing, but included in the total invoice price. 

Staying on top of your financial requirements.


The best way to stay up-to-date with your finances is by using a world-class bookkeeping service such as Rumpel. Our sole trader and small business clients love passing their bookkeeping work onto professionals so they can focus wholeheartedly on their business operations. 

At Rumpel, we have real bookkeepers who look over your expenses and profits on a monthly basis. We provide useful and insightful reports that detail how your business is tracking, as well as letting you know when your BAS (Business Activity Statements) are due.