Most building work in Australia is a taxable supply, so if you're registered for GST you add 10% to your prices and show it on quotes and invoices. If you aren't registered, you can't charge GST and shouldn't show it. Registration becomes compulsory once your GST turnover reaches $75,000 in any 12-month period, current or projected, and many tradies register voluntarily below it so they can claim back the GST on materials and tools.
How GST works for a builder
- 10% on your sales: GST applies to the whole price, labour and materials together, for most work: renovations, repairs, extensions, maintenance and new homes.
- Credits on your purchases: you claim back the GST included in what you buy for the business, such as materials, tools, fuel and the ute (less any private use).
- Business activity statement (BAS): you report the GST you collected and the credits you claimed, monthly, quarterly or annually, and pay the difference to the ATO.
The rules have detail at the edges, such as selling a new home you built, the margin scheme, or mixed private and business use, so check the ATO's guidance or ask a registered tax agent when a job isn't routine.
Tax invoices
A client who is registered for GST needs a tax invoice to claim their credit, and you must give one within 28 days if asked, for any sale over $82.50 including GST. A tax invoice must show:
- that it is intended to be a tax invoice (the words "Tax invoice" at the top are simplest)
- your business name and ABN
- the date it was issued
- a description of the work and materials (with quantities and prices on invoices of $1,000 or more, and good practice on all of them)
- the GST amount, or a statement that the total includes GST
- for sales of $1,000 or more, the buyer's name or ABN
TakeoffYard titles invoices "Tax invoice" and prints your ABN when you set yourself as registered for GST in Settings.
On the quote
Show the price before GST, the GST amount and the total including GST, or a single total marked "includes GST". Under the Australian Consumer Law, the total price you present to a consumer should include GST, so a homeowner should never have to add 10% themselves. A quote that shows only an ex-GST figure looks 10% cheaper than it is, and it's a fast way to lose trust when the invoice arrives.
Not registered?
Don't add GST, don't show a GST line and don't call your invoice a tax invoice. Put your ABN on every invoice anyway: a business client that pays you without one may have to withhold tax from the payment. Watch your turnover against the $75,000 threshold, and register within 21 days of reaching it.
Paying subcontractors
Australia has no reverse charge for building work: a registered subcontractor charges you GST and you claim it back as a credit. If your business is in building and construction and pays contractors, you'll generally need to lodge a taxable payments annual report (TPAR) by 28 August each year, listing what you paid each one.
Common mistakes
- Quoting ex-GST prices to homeowners without making it clear
- Charging GST before registering
- Issuing invoices that are missing what a tax invoice needs
- Spending the GST you've collected before the BAS is due
The GST calculator adds or removes GST correctly (to find the GST in an inclusive price, divide by 11), and TakeoffYard jobs show GST on every quote and invoice.
Quotes, deposits and invoices
Tax follows the paperwork, so keep it consistent from quote to invoice. If you take a deposit, a deposit that is a part-payment is generally reported for GST in the BAS period you invoice or receive it, depending on your accounting method, so issue a tax invoice for it (a deposit held purely as security is treated differently, so check the ATO's guidance). Most states also cap deposits on domestic building contracts, typically at 5–10% of the price. When the job is finished, the final invoice shows the full price, the tax, the deposit already paid and the balance due. TakeoffYard converts an accepted quote into an invoice with the same lines and tax, so nothing is retyped.
Prices that include tax
Homeowners compare totals. If one contractor quotes a figure that includes tax and another quotes a figure that doesn't, the second looks cheaper until the invoice arrives. Make your quotes easy to compare: show the total the client will actually pay, and break the tax out underneath. That's fairer to the client, and it stops you losing work to quotes that only look cheaper.
Keep records
Keep copies of every quote, invoice and supplier receipt, organised by job. The ATO requires you to keep GST and business records for five years, and most businesses now lodge their BAS online, through ATO Online services or their accounting software. A backup of your TakeoffYard jobs is a useful extra record of what was quoted, but it isn't a substitute for proper accounting records.
Get advice
Tax rules change, and the details depend on your business. This guide explains the basics so you can ask the right questions. It isn't tax advice. For anything unusual, or if you're unsure which rate applies, ask an accountant who works with builders.
Common questions
Do I charge GST on labour as well as materials?
Yes. If you're registered, GST applies to the whole supply, labour and materials together. You can't charge GST on the materials only and leave the labour out.
When do I have to register for GST?
When your GST turnover (your business income, not counting GST) reaches $75,000 over the past 12 months, or is expected to over the next 12. Register within 21 days. You can register earlier if you choose.
Can I claim GST on materials if I'm not registered?
No. If you aren't registered, the GST you pay on materials is part of your cost, so build it into your prices.
This guide is general information for estimating. It is not engineering, legal or tax advice. Check the NCC, Australian Standards and your building surveyor or certifier for your project.