ABN, GST, and BAS: What Tradies Need to Know

Running a trade business in Australia isn’t just about doing great work on-site—it also means keeping on top of your business finances and compliance. If you're a tradie, you've probably heard of ABNs, GST, and BAS, but do you know exactly how they impact your business? Let’s break it down in a way that makes sense.

What is an ABN and Do You Need One?

An Australian Business Number (ABN) is an 11-digit number that identifies your business to the government, customers, and suppliers. If you're running a trade business, chances are you need one. The ATO suggests applying for an ABN when starting out as a sole trader, irrespective of your annual turnover. If your turnover is less than $75,000, you can choose to apply for an ABN but not register for GST—you don't have to do both.

Having an ABN allows you to issue invoices, claim GST credits, and avoid having tax withheld at the highest rate on payments from clients.

GST: Do You Need to Register?

Goods and Services Tax (GST) is a 10% tax added to most goods and services sold in Australia. If your business earns $75,000 or more per year, you must register for GST. If you’re under that threshold, you can register voluntarily, but it’s not required.

How GST Works for Tradies:

• You charge 10% GST on your invoices (e.g., if you quote $1,000 for a job, you’ll charge $1,100 including GST).
• You collect this GST from your customers and pay it to the ATO.
• You can claim GST credits for business expenses (such as tools, equipment, fuel, and materials) where GST is included in the price.

What Happens if You Don’t Register When You Should?

If you don’t register for GST when required, you could be hit with penalties and still have to pay GST on past sales—even if you didn’t charge it to customers. That’s a costly mistake!

What is a BAS and When Do You Need to Lodge One?

A Business Activity Statement (BAS) is a form used by the ATO for entities to report their tax liabilities, such as GST, PAYG withholding, fuel tax credits, and other taxes. It helps businesses track and pay the taxes they owe in a structured manner.

When Do You Lodge a BAS?

If you're registered for GST, the ATO will require you to lodge a BAS either monthly, quarterly, or annually, depending on your business size. Most tradies submit BAS quarterly.

What’s Included in a BAS?

• Total sales and GST collected.
• GST credits from business purchases.
• PAYG withholding tax (if you have employees).
• Fuel tax credits and any other relevant tax obligations.

Lodging your BAS late can result in fines and interest charges, so it’s crucial to stay on top of it.

How a Bookkeeper Can Help

As a tradie, you probably don’t have time to sit down and work through tax laws, BAS deadlines, and GST calculations. That’s where a bookkeeper comes in:

• We keep track of your income and expenses so you don’t have to.
• We prepare and lodge your BAS correctly and on time.
• We help you claim all your deductions and GST credits, so you don’t pay more tax than necessary.

Final Thoughts

Understanding ABNs, GST, and BAS is crucial for any tradie running their own business. If you’re earning over $75,000 per year, you must register for GST and lodge a BAS regularly. Mistakes can be costly, so staying organised or working with a bookkeeper can save you time, stress, and money.