Quick answer: For a GST-registered Australian freelancer, cash-basis GST generally means reporting GST when customers pay and when you pay suppliers. Non-cash (accruals) GST generally means reporting when an invoice is issued or a payment is received, whichever happens first. The choice can change which BAS quarter contains a transaction, even when the invoice amount is identical.
Updated 12 October 2026. Australian-English educational guide for sole traders and freelancers. All figures are in Australian dollars. This is general information, not personalised tax advice. Confirm your accounting basis and BAS obligations with the ATO or a registered tax/BAS agent.
Cash vs accrual GST: key differences
Imagine a web designer who invoices $3,300 on 29 September and gets paid on 15 October. The $300 GST on this ordinary taxable service may be reported in different quarters depending on the registered GST accounting method. That timing can matter when a customer is slow to pay.
| Question | Cash-basis GST | Non-cash (accruals) GST |
|---|---|---|
| Taxable sale | Generally when payment is received, to the extent received. | Generally when an invoice is issued or payment received, whichever happens first. |
| Creditable purchase | Generally when payment is made, subject to valid documentation. | Generally when an invoice is received or payment made, whichever occurs first, subject to the rules. |
| Unpaid customer invoices | Usually less pressure to fund GST before being paid. | GST can fall due before the customer pays. |
| Records to prioritise | Payment dates and part-payments. | Invoice dates, payment dates and adjustments. |
| Who may use it? | Eligible businesses that use cash-basis GST accounting. | Businesses using non-cash GST accounting. |
Do not confuse GST reporting with income tax: a GST cash-basis election does not automatically determine every income-tax or management-accounting treatment. Read the ATO’s cash-basis GST explanation for an official cross-quarter example.
Who can use cash-basis GST in Australia?
According to business.gov.au, a business with aggregated turnover below $10 million may be eligible to account for GST on a cash basis. Eligibility is not an automatic change of method. Check the method registered with the ATO before using cash-basis calculations on a BAS, especially if you have unpaid invoices, adjustments or complex supplies.
Check the $75,000 registration threshold first
The usual GST registration threshold for a business is $75,000 in GST turnover, not profit. The ATO looks at current turnover (this month plus the previous 11 months) and projected turnover (this month plus the next 11 months), with exclusions and qualifications. You generally have 21 days to register after you become required to register. Taxi, limousine and ride-sourcing services have special rules requiring registration regardless of turnover. See ATO: registering for GST.
Example: a designer has $48,000 in current turnover but signs a new retainer that makes projected GST turnover likely to reach $84,000. They should check their registration requirement now, rather than waiting for the previous 12 months of sales to reach $75,000. Some transactions are excluded from the threshold calculations, so do not simply use every deposit into a bank account.
If you are not registered, you cannot simply charge GST and claim GST credits as though you were. Voluntary registration below the threshold is possible, but brings GST reporting responsibilities. Keep GST registration separate from your decision to use cash or non-cash GST accounting.
Worked example: one invoice, two BAS quarters
A GST-registered freelance designer supplies an ordinary taxable website project. The invoice is $3,300 including GST: $3,000 service fee plus $300 GST. It is issued on 29 September 2026 and paid on 15 October 2026.
| Event | Cash basis | Non-cash basis |
|---|---|---|
| Invoice issued 29 September | No payment, so generally no sales GST yet. | $300 sales GST in July–September quarter. |
| Payment received 15 October | $300 sales GST in October–December quarter. | No second $300 on the same sale. |
| Standard BAS date | Q2 due 28 February 2027. | Q1 due 28 October 2026. |
The example assumes a standard 10% taxable supply and no special adjustments. Your BAS may have a different due date under online or agent concessions. Check the ATO’s BAS due-date page.
GST formula: 10% versus one-eleventh
For a fully taxable service priced excluding GST, multiply by 10%: $3,000 × 10% = $300 GST, giving a $3,300 invoice. For an amount including GST, divide by 11: $3,300 ÷ 11 = $300 GST. Taking 10% of $3,300 would incorrectly give $330. These formulas do not apply without adjustment to GST-free, input-taxed or mixed-rate supplies.
Deposits and part-payments: a two-quarter example
Suppose a consultant issues a $5,500 GST-inclusive invoice for a taxable project. The customer pays $2,200 on 20 September and the remaining $3,300 on 20 October. Under cash-basis GST, assuming no special rules, the first payment generally brings $200 GST into July–September ($2,200 ÷ 11), and the second brings $300 GST into October–December ($3,300 ÷ 11). Under non-cash accounting, an earlier invoice or payment can trigger the full GST in an earlier period; the later payment must not create a second charge.
Watch out: a genuine security deposit can have different GST treatment from an ordinary part-payment. The contract and nature of the deposit matter. Credit notes, refunds, bad debts and cancelled jobs also need specific treatment, not a blind spreadsheet formula.
GST credits: the other half of the BAS calculation
GST on sales is not necessarily the amount you pay the ATO. Registered businesses may be able to claim GST credits for eligible business purchases on which GST was actually charged. Suppose you buy software and equipment for $1,100 including GST, entirely for taxable business activities. If the supplier is registered, the purchase is creditable and documentation is valid, the GST credit may be $100. A $1,100 payment to a supplier who did not charge GST does not contain a $100 GST credit.
For purchases over $82.50 including GST, you generally need a valid tax invoice to claim GST credits. Smaller purchases still need supporting evidence. Personal use, GST-free supplies and purchases connected with input-taxed sales require care. The ATO’s GST-credit guidance explains the conditions.
Net GST example: calculate both sides
Assume a quarter contains $22,000 of wholly taxable GST-inclusive sales and $4,400 of wholly creditable GST-inclusive business purchases. GST on sales is $22,000 ÷ 11 = $2,000. Eligible GST credits are $4,400 ÷ 11 = $400. Illustrative net GST is $1,600 ($2,000 minus $400), before other BAS items or adjustments. The entire BAS payable may be different because PAYG instalments or other obligations can also appear.
Setting aside the gross GST collected is a conservative cash-flow habit, not a rule that determines the BAS amount. Reconcile the reserve to the actual GST liability and other obligations before paying yourself. For broader cash-flow planning, use NoviraLane’s 13-week cash-flow forecast.
GST tracking spreadsheet: practical setup
Track invoice number, issue date, customer, GST-inclusive total, GST amount, payments received, payment date, supplier invoices and BAS quarter. Enter part-payments separately. For wholly taxable GST-inclusive sales, divide by 11 to calculate the GST component; do not use this shortcut for GST-free or mixed supplies. Reconcile records to bank statements monthly.
BAS dates and preparation
Standard quarterly BAS due dates are generally 28 October, 28 February, 28 April and 28 July. Extensions may apply; follow your ATO activity statement. Check GST on sales, eligible credits, adjustments and payment timing before lodging.
30-day GST bookkeeping roadmap
- Days 1–5: Check GST registration and the accounting basis recorded with the ATO.
- Days 6–10: Organise invoices, bank feeds and tax-invoice evidence.
- Days 11–15: Track invoice dates, payment dates and partial payments.
- Days 16–20: Review business purchases and potential GST credits.
- Days 21–25: Reconcile each BAS quarter with accounting records.
- Days 26–30: Check deadlines, resolve differences and consult a registered BAS or tax agent if necessary.
Frequently asked questions
Does cash-basis GST determine income-tax accounting?
No. GST attribution and income-tax accounting are separate matters.
Can any freelancer use cash-basis GST?
No. Eligibility rules apply. Confirm your method and any change with the ATO.
Does every freelancer need GST registration?
No. The general $75,000 GST turnover threshold has exceptions, including ride-sourcing activities.
What if a client pays in instalments?
Cash-basis GST is generally attributed to payments as received, subject to special rules and adjustments.
Can I claim GST credits on every purchase?
No. Creditability, valid evidence and business-use rules apply. Refer to ATO GST guidance.
For related planning, see NoviraLane’s freelance rate calculator and business expense spreadsheet; check jurisdiction-specific advice before applying it in Australia.
