Do Plumbers Need to Charge GST in Australia? (Complete Guide)
The $75,000 Threshold
GST registration is mandatory once your business turnover (total revenue, not profit) reaches $75,000 in a 12-month period. For a full-time plumber charging $80/hour and working 5 days a week, you'll hit $75,000 within 6-8 months.
Important: It's based on when you EXPECT to exceed $75,000, not when you actually do. If you start getting busy and project you'll hit $75k this year, register now — don't wait until you cross the line.
How GST Works for Plumbers
Charging GST (Output Tax)
Once registered, you add 10% to every invoice. A $500 job becomes $550 ($500 + $50 GST). Your invoice must show the GST amount separately and include the words "Tax Invoice."
Claiming GST Back (Input Tax Credits)
The upside: you can claim back the GST on everything you buy for business. Materials from Reece, fuel, tools, van expenses, phone bill, software subscriptions — you get 10% back on all of it.
BAS Lodgement
Every quarter (or monthly if you prefer), you lodge a Business Activity Statement (BAS) with the ATO. You report: GST collected from customers minus GST paid on business expenses = amount you owe (or get refunded).
Should You Register Before $75,000?
You can voluntarily register for GST even if you're under $75,000. Reasons to consider it:
- Claim back GST on startup costs: Van, tools, equipment — that's thousands in GST credits
- Look more professional: Builders and property managers prefer GST-registered contractors
- Avoid the shock: If you register at $75k, you suddenly need to charge 10% more — existing customers notice
What Happens If You Don't Register?
If you exceed $75,000 and don't register, the ATO can:
- Back-date your registration to when you should have registered
- Require you to pay GST on all income since that date (out of your own pocket)
- Issue penalties of up to $11,100 per quarter of non-compliance
Pricing Strategy with GST
When you register for GST, you have two choices:
- Absorb it: Keep your prices the same and cop the 10% hit (not recommended)
- Add it on top: Increase all prices by 10% and show GST separately (recommended)
Most customers expect to pay GST. Residential customers rarely question it. Commercial customers and builders actually prefer it because they can claim it back themselves.
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