GST and Salon Bookings: A Plain-English Guide for Australian Owners

GST is one of those areas where the rules are simpler than they look — but the consequences of getting them wrong can be expensive. Here's the practical guide for Australian salon owners.

When you have to register

If your annual turnover crosses $75,000, you must register for GST. "Annual turnover" means total revenue including the GST component, not your taxable profit. A solo stylist doing $2,000/week ticks past the threshold around month nine.

If you expect to cross the threshold in the next 12 months, you should register early — backdating registration causes paperwork pain.

What GST actually does to your prices

Once registered, you charge 10% GST on all services. The pricing question is: do you absorb the GST or pass it on?

Absorbing GST: if your menu price stays at $80, you're effectively earning $72.73 and remitting $7.27 to the ATO. Your take-home drops by 9%.

Passing it on: you raise your menu price from $80 to $88. The customer pays the extra $8 (which goes to the ATO). Your take-home stays the same.

Most salons pass it on at the point of registration, with a clear "prices exclude GST" line on the booking page. Long-term clients sometimes balk; new clients never notice.

What you can claim back

You get the GST you paid on business expenses back as input tax credits. Claimable purchases:

• Salon supplies (shampoo, colour, products for resale)
• Rent on commercial premises (often, depends on landlord registration)
• Software subscriptions (Trimsy, Xero)
• Equipment (chairs, dryers, sterilisers)
• Marketing and advertising
• Business insurance

You can't claim GST on personal expenses, even if you bought them on the business card.

Invoicing rules

Once GST registered, every invoice over $82.50 must show:

• Your ABN
• The words "Tax Invoice"
• GST amount as a separate line
• Your name and address (or business name)
• Date of issue
• Customer name (over $1,000 invoices)

Most booking + POS software handles this automatically. Trimsy's receipts include all required fields by default once you flip on GST in settings.

The BAS quarterly cycle

GST is paid quarterly via Business Activity Statement (BAS):

• Q1: April–June, due August 28
• Q2: July–September, due November 28
• Q3: October–December, due February 28
• Q4: January–March, due May 28

Your accountant or accounting software calculates: GST collected from customers — GST paid on expenses = amount owing.

Common mistakes

1. Not registering on time. Penalties for late registration include paying back-dated GST without being able to claim it from customers.
2. Mixing personal and business expenses. Use a business bank account from day one. The ATO disallows claims that can't be cleanly traced to business activity.
3. Forgetting GST on tips. Tips processed through your card terminal count as revenue. GST applies. Cash tips are technically the staff member's income, not the salon's.
4. Not keeping receipts for purchases. No receipt = no GST credit. Email receipts to a dedicated folder; the ATO accepts digital copies.

When in doubt

Hire an accountant who specialises in small business. A good one charges $500–$1,500/year for quarterly BAS lodgement and saves you many times that in claimed credits and avoided penalties.