Current Turnover vs Projected Turnover: The Two Tests That Decide Registration

Introduction

GST registration in Australia is not optional for every business. The Australian Taxation Office (ATO) uses two distinct turnover tests—current turnover and projected turnover—to determine whether a business must register for GST. Understanding the difference between these two tests is critical for sole traders, small business operators, bookkeepers, and importers. This article explains each test in detail, provides step-by-step calculation methods, and highlights common pitfalls. By the end, you will know exactly which test applies to your situation and how to stay compliant.

What is Current Turnover?

Current turnover refers to the total value of all supplies made by your enterprise in the current month and the previous 11 months. It is a backward-looking measure that captures your actual business activity over the past 12 months. The ATO uses this figure to assess whether your business has already exceeded the GST registration threshold.

Key Components of Current Turnover

• Taxable supplies – goods and services subject to GST (including GST-free supplies like basic food, health, education, and exports).
• Input-taxed supplies – supplies such as residential rent or financial services that do not carry GST but are still counted in turnover.
• Non-GST supplies – supplies made outside Australia or other excluded items.

Expert Tip: Current turnover includes all supplies, not just those on which you charge GST. Even if you sell GST-free goods, those sales count toward the threshold.

What is Projected Turnover?

Projected turnover is a forward-looking estimate of the total value of supplies you expect to make in the current month and the next 11 months. It is used when you are starting a new business, expanding operations, or entering a seasonal peak. The ATO requires you to register for GST if your projected turnover is likely to exceed the threshold.

When Projected Turnover Applies

• New businesses that have not yet completed 12 months of trading.
• Existing businesses that anticipate a significant increase in sales (e.g., a new contract, product launch, or seasonal surge).
• Businesses that have recently changed their structure or ownership.

The GST Registration Threshold

The GST registration threshold is the turnover amount that triggers the obligation to register. As of the current ATO guidelines:

If your current or projected turnover exceeds the applicable threshold, you must register for GST. If it is below the threshold, registration is voluntary.

When to Use Each Test

The ATO requires you to apply both tests at all times. You must register if either test indicates that your turnover exceeds the threshold.

Decision Tree for Registration

1. Calculate your current turnover (past 12 months).
2. If current turnover exceeds the threshold → you must register immediately.
3. If current turnover is below the threshold, calculate your projected turnover (next 12 months).
4. If projected turnover exceeds the threshold → you must register.
5. If both are below the threshold → registration is voluntary.

Important: You cannot choose which test to use. Both must be considered. A common mistake is relying only on current turnover and ignoring projected growth.

How to Calculate Current Turnover

To calculate current turnover, sum the total value of all supplies made in the current month and the previous 11 months. Use the following formula:

Current Turnover = Sum of supplies (current month + previous 11 months)

Step-by-Step Example

Imagine a sole trader, Alex, runs a consulting business. In the past 12 months (ending June 2025), Alex’s monthly sales were:

Total = $73,500. Since this is below $75,000, Alex does not need to register based on current turnover. However, Alex must also check projected turnover.

How to Calculate Projected Turnover

Projected turnover is the total value of supplies you expect to make in the current month and the next 11 months. It requires a reasonable estimate based on current orders, contracts, seasonal trends, and business plans.

Step-by-Step Example (Continuing from above)

Alex has signed a new contract worth $10,000 per month starting July 2025. Alex’s projected sales for the next 12 months (July 2025 to June 2026) are:

Total = $194,000. This exceeds $75,000, so Alex must register for GST immediately, even though current turnover was below the threshold.

Expert Tip: The ATO expects you to update your projected turnover regularly. If your actual sales differ significantly from your projection, you may need to adjust your registration status.

Special Cases and Exceptions

Non-Profit Organisations

Non-profits have a higher threshold of $150,000. However, they must still apply both tests. If a non-profit’s current or projected turnover exceeds $150,000, registration is mandatory.

Taxi and Ride-Sourcing Drivers

Regardless of turnover, all taxi and ride-sourcing drivers (including Uber, Ola, Didi) must register for GST. The $75,000 threshold does not apply.

Importers

Importers must consider the value of imported goods as part of their turnover. If you import goods for resale, the sale price (not the import cost) counts toward turnover. Additionally, GST is payable on imports at the border, and registration allows you to claim input tax credits on those imports.

Grouping and Associates

If you operate multiple businesses or are part of a GST group, the turnover of all entities may be aggregated for the threshold test. Consult the ATO’s grouping rules or a registered tax agent.

GST Calculator & Tools

At gstcalculatorau.com, we provide a full suite of GST calculators to help you manage your turnover tests and compliance. Our tools include:

• GST Registration Threshold Calculator – Enter your monthly sales to instantly see if your current or projected turnover exceeds the threshold.
• GST Amount Calculator – Add or remove GST from any amount.
• BAS Preparer – Generate a draft Business Activity Statement (BAS) with your turnover and GST figures.

Step-by-Step Guide to Using the Threshold Calculator

1. Navigate to the GST Registration Threshold Calculator on gstcalculatorau.com.
2. Select your business type (general, non-profit, or taxi/ride-sourcing).
3. Enter your monthly sales for the past 12 months (or expected sales for the next 12 months).
4. Click Calculate.
5. The tool will display your current turnover, projected turnover, and whether registration is required.

Use the calculator regularly, especially when your business experiences growth or seasonal fluctuations.

Common GST Mistakes to Avoid

• Ignoring projected turnover – Many businesses only check current turnover and miss the obligation to register when future sales are expected to exceed the threshold.
• Using net profit instead of gross turnover – Turnover is the total value of supplies, not your profit. Do not deduct expenses.
• Forgetting GST-free supplies – Even if you sell GST-free goods (e.g., basic food), those sales count toward the threshold.
• Not updating projections – If your business grows faster than expected, you must re-evaluate your projected turnover and register if necessary.
• Assuming the threshold applies to taxi drivers – Taxi and ride-sourcing drivers must register regardless of turnover.
• Miscalculating the 12-month period – The current month is included in both current and projected turnover calculations. Ensure you use the correct 12-month window.
• Failing to register on time – If you exceed the threshold, you must register within 21 days (or 28 days for some entities). Late registration can result in penalties and backdated GST liability.

Conclusion

Understanding the difference between current turnover and projected turnover is essential for every Australian business. The ATO requires you to apply both tests, and failing to do so can lead to unexpected GST liabilities and penalties. By regularly calculating your turnover using the tools at gstcalculatorau.com, you can stay compliant and make informed decisions about registration. Remember, if you are unsure about your specific situation, consult a registered tax agent. Use our searchable database to see how GST applies to real goods, services, and transactions.