Most practitioners assume the goods and services tax (GST) simply doesn't apply until they hit the $75,000 threshold. The reality however is a bit more layered. On the one hand, $75,000 is a clear threshold set by the Australian Tax Office (ATO). But on the other hand, most clinical Allied Health services are GST-free, regardless of how much you earn.These two facts don't always work together the way you'd expect. More importantly, the gap between them is where growing practitioners get caught out.
What is GST and how does the 10% tax work in Australia?
The goods and services tax (GST) is a 10% tax applied to most goods and services sold in Australia. When a business is registered for GST, it adds 10% to the price of its taxable sales, collects that amount from the customer, and passes it on to the Australian Taxation Office (ATO).
But, not everything attracts GST. Some supplies are GST-free. This means no GST is charged on them at all. Others are input-taxed, which sits outside the scope of most Allied Health work. Essential items such as fresh fruit and vegetables, physiotherapy, podiatry, and dental are all considered essential, making them all GST-free.
Registered businesses report what they've collected, and what they've paid, through a Business Activity Statement (BAS), usually each quarter. The difference is either paid to the ATO or refunded to the business. That's the whole mechanism. The detail that matters for you is which category your income falls into, and whether you need to register at all.
When do I actually need to register for GST in Australia?
GST registration becomes mandatory once your GST turnover reaches $75,000. There's no mandatory registration below the threshold. For example, a sole trader physiotherapist earning $68,000 in clinical fees does not need to register for GST, charge it, or lodge a BAS.They can however register voluntarily if they choose.
Understanding GST turnover
GST turnover is your gross income before expenses, not your profit. It's the total of your business income, calculated before you subtract rent, software, insurance, or anything else. For example, let’s imagine a sole trader physiotherapist bills $80,000 in fees but takes home $50,000 after costs. They still have a GST turnover of $80,000, not $50,000.
The 21-day rule and the two tests
The ATO applies two tests to decide whether you've hit the GST registration threshold as a sole trader.
- Your current GST turnover: The ATO considers your turnover over the current month and the previous 11 months. If that total is $75,000 or more, you've reached the threshold.
- Your projected GST turnover: The ATO considers the current month and the next 11 months. If you reasonably expect your turnover to reach $75,000, you need to register, even if you haven't earned it yet.
Once you reach or expect to reach the threshold, you have 21 days to register for GST . Miss that window and you can end up with backdated GST liability. So even as you get busy with bigger caseloads, we recommend keeping an eye on your business income numbers.
Are Allied Health services GST-free in Australia?
Most Allied Health services are GST-free supplies under the A New Tax System (Goods and Services Tax) Act 1999. This means GST is not charged on them regardless of their turnover. You can find the relevant exemptions in Subdivision 38-B of the Act.
A health service is GST-free when the following two conditions are met:
- The service is provided by a recognised health professional in that field.
- The service is generally accepted, within that profession, as necessary for the appropriate treatment of the client.
Which professions are covered to be GST-free in Australia?
If delivered as clinical care to your clients, the following professions are considered to be GST-free services:
- Physiotherapy
- Occupational therapy
- Speech pathology
- Psychology
- Dietetics
- Podiatry
GST-free income still counts toward the threshold
Being GST-free doesn't mean your GST-free income is invisible to the threshold calculation. It simply means you don't charge GST on it. Your GST-free income still counts toward your $75,000 GST turnover.
But in some cases, you may need to register for GST while still not charging GST on your clinical fees. Here’s an example to simplify this concept:
Imagine a sole trader occupational therapist (OT) who earns $90,000 entirely from NDIS therapy sessions. Every one of those sessions is GST-free. But at $90,000, his income exceeds the $75,000 threshold. This means the OT must register for GST.
But even after they register, they charge $0 GST on their invoices. This is because the services themselves continue to remain GST-free. Instead the OT has to lodge a Business Activity Statement (BAS), even as their clients see no price change.
Which Allied Health services income streams trigger GST registration?
The clinical service exemption for GST applies only to clinical services. But if your practice picks up income that sits outside that, those services trigger GST. Common taxable supplies in Allied Health include:
- Sale of products: This includes items such as braces, therabands, splints, or equipment you on-sell to clients
- Gym or fitness memberships: If offered through your practice
- Non-clinical workshops or training: If sold to the public or to organisations
- Consulting or supervision services: If provided to businesses rather than treating a client
- Health coaching: If delivered without a genuine clinical nexus
What happens to my invoices when I cross the GST threshold?
If your income is entirely GST-free clinical work, you're not raising prices on your clients. This means there’s no changes to be made to your invoices. When you cross $75,000 and register, here's what changes in practice:
- Your invoices show your Australian Business Number (ABN): For GST-free services, your invoice notes the GST-free status and shows $0 GST. For any taxable supplies, you issue a tax invoice showing the 10% GST amount separately.
- You lodge a Business Activity Statement (BAS): This is usually done quarterly, sometimes monthly depending on your turnover. The BAS is where you report what you've collected and what you've paid.
- You update your practice management software settings: This ensures GST is handled correctly per service type. Getting this configured once saves you hours of reconciling it later.
Learn how to make input tax credits work in your favour
Once you're registered, you can claim input tax credits, which means claiming back the GST you've paid on business expenses. You can recover GST costs on software, equipment, professional development, and other purchases. For a practice with real overheads, that's money returned to you each BAS cycle.
Do my GST obligations change as a contractor vs being an employee?
Yes, your working arrangement decides whether your income counts toward the threshold at all. Here are the three potential scenarios you might find yourself in regarding GST:
If you're an employee: You don't register for GST. Your income is paid through Pay As You Go (PAYG) withholding. This means it's not a business turnover, and sits outside the GST system entirely. An employed psychologist earning $90,000 in salary has no GST obligation on that income.
If you're a contractor holding an ABN: Your contracting income is business turnover and counts toward the $75,000 GST threshold . A contractor psychologist invoicing practices for their sessions does need to track that income, and register once it reaches the threshold.
If you work as an employee and a contractor: if your work is partly based on you being an employee while the rest of your time is spent as sole trader contractor, only your employee income is GST-free. Your contractor income still counts toward your GST turnover. Earn $50,000 as an employee and $30,000 as a contractor, and only the $30,000 sits against the threshold. You're well under and not required to register.
Should I register for GST voluntarily even if I’m under the threshold?
You can register for GST voluntarily while under $75,000. But for most clinical sole traders, it rarely makes financial sense. Here’s a case for why you should (and shouldn’t) consider voluntary GST registration.
Here’s why you might consider it: Voluntary registration lets you claim input tax credits on equipment, software, CPD, and other business expenses. If you've just spent heavily on fit-out or equipment, recovering that GST can be worthwhile.
Here’s why you might not consider it: Registration brings BAS lodgement obligations and ongoing admin. Plus, for Allied Health, most clinical income is GST-free anyway. This means while you take on the reporting burden, you still can't claim much back on the sales side.
The practical rule of thumb: if your income is predominantly GST-free clinical services, voluntary registration usually isn't worth the admin. It may suit you if you have significant taxable supply income, such as product sales, or genuinely high equipment costs you want to recover GST on. For most sole trader practitioners under the threshold, the simpler path is to stay unregistered until your turnover tells you otherwise.
GST doesn't have to be complicated if you know your position
Most clinical Allied Health services are GST-free no matter what you earn, and registration only becomes mandatory once your turnover reaches $75,000. Knowing where you sit today means the threshold arrives as a planned milestone, not a surprise.
A quick action for this week: separate your income into clinical and non-clinical, then check your rolling twelve-month turnover against $75,000. That single review tells you whether you're approaching the line and gives you time to prepare your billing before you cross it.
Let splose help you prepare for GST ahead of time
As your calendar fills, your referrals grow, and you start thinking about a second room or a first hire, organised billing keeps that momentum clean. A practice management system like splose helps you track your practice revenue and handles the threshold transition smoothly.
In the end, it all comes down to ensuring the business side keeps pace with the practice you're building.
Disclaimer: It’s critical to get formal advice to understand your own profession's position on GST rather than assuming. We recommend confirming your exact position with your accountant before taking any decisions.
Sources
[1] What is GST? GST guide and calculator for sole traders | Hnry — https://hnry.com.au/resources/tax-101/what-is-gst-and-how-does-it-work
[2] What are my GST tax (as a sole trader) obligations in this scenario — https://community.ato.gov.au/s/question/a0JRF000001Bhib/p-00289268
[11] What is GST in Australia? - BOX Advisory Services — https://www.boxas.com.au/small-business-handbook/all-you-need-to-know-gst
[9] Complete Guide to GST Registration in Australia for SMEs — https://smartdigits.com.au/blog/gst-registration-australia-2026-guide
[7] Empire Accountants - Navigating the GST system for Health Service Professionals — https://www.empireaccountants.com.au/blog/tax/navigating-the-gst-system-for-health-service-professionals
[4] GST for allied health | Better Clinics — https://www.betterclinicsapp.com/blog/gst-for-allied-health
[6] About 5 — Rebound Academy — https://www.reboundacademy.com.au/understanding-gst-for-exercise-physiologists
[5] Do contractor Psychologists need to charge GST on their invoices? — https://www.alliedhealthaccounting.com.au/post/do-contractor-psychologists-need-to-charge-gst-on-their-invoices
[12] Beginners Guide to GST in Australia - H&R Block — https://www.hrblock.com.au/tax-academy/beginners-guide-to-gst
