Do I need to put GST on a quote?

Every tradie hits this one early. You are writing up a quote for a bathroom or a repaint and you stop at the bottom line: ex GST, inc GST, or both? It depends on whether your business is registered for GST and who is reading the quote. Here is the rule, the ATO threshold behind it, and a layout that gets it right every time.

The short answer

If your business is registered for GST, yes. Put GST on every quote. The ATO says registered businesses include GST in the price they charge, and a quote is that price before the client says yes. If a homeowner is reading it, the total they will actually pay, including GST, has to be there as a single figure. Show the ex-GST breakdown if you like, but the inc-GST total must be at least as prominent.

If you are not registered for GST, the answer is no. Do not add 10%, do not show a GST line, and do not head your invoice Tax Invoice. The ATO says an unregistered business issues standard invoices, not tax invoices.

When you must register for GST

GST is a broad-based tax of 10% on most goods, services and other items sold or consumed in Australia. Whether you have to charge it comes down to your GST turnover, which the ATO defines as your total business income, not your profit, minus the GST included in your sales. Turnover, not profit, so a busy year on thin margins still counts.

You must register when your GST turnover is $75,000 or more. The ATO measures it two ways: current GST turnover, the current month plus the previous 11 months, and projected GST turnover, the current month plus the next 11 months. Reach $75,000 on either and you have hit the threshold, with one exception the ATO spells out: if your current turnover is at or above $75,000 but your projected turnover will be under it, you do not have to register. A new business that expects to reach the threshold in its first year has to register from the start. Once you are required to register you have 21 days to do it, you need an ABN first, and the ATO says an unregistered business should check each month whether it has reached the threshold or is likely to exceed it.

Under the threshold, registering is optional. Some tradies do it anyway to claim back the GST on a new ute and tools. If you choose to register, the ATO says you generally have to stay registered for at least 12 months.

Once registered, the ATO lists what changes: include GST in the price of your taxable sales, issue tax invoices for those sales and get tax invoices for your purchases, claim GST credits for the GST included in what you buy for the business, put aside the GST you collect so you can pay it when it is due, and lodge activity statements or annual returns to report it all. In plain terms, every quote from that day carries GST, every invoice becomes a tax invoice, and the BAS becomes part of your quarter.

Getting this wrong costs real money. The ATO says that if you were required to register and did not, you may have to pay GST on sales made since the date you should have registered, even if you never included GST in the price, with penalties and interest on top. That is the GST on every sale since that date coming out of your pocket, not the client's.

Quoting to homeowners vs businesses

A quote to a homeowner is a price displayed to a consumer, and Australian Consumer Law has rules for that. The ACCC says businesses must display the total price of a product or service as a single figure, and that price must be the minimum total cost: the lowest amount a customer could pay, including any taxes, duties and unavoidable or pre-selected extra fees. GST is a tax, so the total on a homeowner's quote is the GST-inclusive figure. The ACCC also lists advertising a price that is not the total price the consumer will have to pay among its examples of a misleading price display.

You can still break the price down. The ACCC says that if a business also displays a price for just one part of a product or service, the total price must be at least as prominent as the partial price. An ex-GST subtotal and a GST line are fine, as long as the inc-GST total is the number that stands out. What you cannot do is quote $10,000 in big type with a small note that GST will be added.

Business-to-business is different. The ACCC says that if a business is displaying prices only to other businesses, it does not need to include GST in the total price. That is why quotes to builders and commercial clients, and supplier price lists, often run ex GST. Quoting a builder ex GST is common. The trap is being vague about it. Write plus GST on every line and show the GST amount and the inc-GST total at the bottom anyway. It heads off the argument if their bookkeeper pays the ex-GST figure and calls it settled.

Both cases come back to the same line in business.gov.au's quote checklist: a written quote should show itemised and total costs, and include GST if applicable. The same page notes that an accepted quote becomes a legally binding contract, which is why the difference between a quote and an estimate matters. A binding price that is silent on GST is a binding price you cannot add 10% to later.

What a tax invoice must show

Once you are registered, the invoice that follows the quote has to be a tax invoice, and the ATO is specific about what that means. If a customer asks for one, you must provide it within 28 days, unless the sale is $82.50 including GST or less. For a taxable sale under $1,000 the ATO says the document must include enough information to clearly determine seven details:

1. That the document is intended to be a tax invoice: the words Tax Invoice at the top.
2. The seller's identity, meaning your business name.
3. The seller's ABN.
4. The date the invoice was issued.
5. A brief description of the items sold, including the quantity if applicable and the price.
6. The GST amount payable, shown separately or, where GST is exactly one-eleventh of the total price, as the statement Total price includes GST.
7. The extent to which each sale on the invoice is a taxable sale.

For sales of $1,000 or more the tax invoice also needs to show the buyer's identity or ABN. The ATO notes that an invoice meeting the $1,000-and-over requirements can be used for smaller sales too, so use one template that always names the client. It does not need to be paper: the ATO says an emailed PDF is fine, as long as it carries everything on the list.

The useful trick is to lay out the quote the same way. Client name, your ABN, an itemised description, the GST amount and the inc-GST total are all things the client wants before they say yes. Then the invoice is the same document with a new heading and date, and any progress claims and payment stages on a bigger job inherit the same structure.

A quote layout that gets GST right

Here is the layout for a $10,000 job, ex GST, split across labour, materials and disposal. Every line carries its own GST, and the totals row is the one in bold.

Work the GST from the ex-GST figure, never the other way round. GST is 10% on top of the price, so the GST inside an inc-GST figure is one-eleventh of it, not 10% of it. Then follow the ATO's list: ABN, client name, date, a description and quantity per line, and either a GST column or the words Total price includes GST when GST is exactly one-eleventh of the total. Add a validity date and payment terms and the same document becomes the tax invoice.

On rounding, the ATO says that where a tax invoice has one taxable sale and the GST includes a fraction of a cent, round to the nearest cent, with half a cent rounding up. Most quoting software does this for you. A spreadsheet will happily print four decimal places.

Common mistakes

• Quoting ex GST to a homeowner and adding 10% on the invoice. The client saw one number and is paying another, which is one of the misleading price displays the ACCC lists.
• Charging GST when you are not registered. The extra 10% is not GST, and you cannot head the document Tax Invoice.
• Adding GST twice on materials. The supplier price already included GST, and you claim that back as a GST credit. Quote materials at your ex-GST sell price and put GST on that.
• Marking up the GST. Margin goes on the ex-GST cost, then GST on the result, the way our guide on how to quote a carpentry job builds a price.
• Costing jobs on inc-GST figures. The $1,000 in the table above is not revenue. Track job value and costs ex GST, the way the job costing guide does.
• Spending the GST, or leaving off your ABN or the client's name on jobs of $1,000 or more. The ATO says to put the GST aside, and a client's bookkeeper may bounce an invoice that misses the list.

Do it once in your quoting tool

None of this is hard. It is just easy to get wrong at 9pm on a phone. Set the rule once in your quoting tool: GST on or off, ex-GST pricing with a GST column and an inc-GST total, and your ABN and the client's details on every document. Then every quote and tax invoice comes out the same way.

To check a job before you send it, run the ex-GST price, materials and hours through the job profit calculator for the margin, then the GST quote calculator to add GST or pull it out of an inc-GST figure. TrackYaTradie does the GST maths on every quote and invoice, turns the accepted quote into the tax invoice, and can sync invoices to Xero so the GST is in your books before the BAS is due. See how it works for your trade, for example built for painters.