GST for hair salons in Australia: threshold and BAS

GST looks simple from the outside: 10% on everything, done. From behind a salon reception desk it is anything but. The registration threshold is measured in a way that surprises people, chair rent and retail sales count when owners assume they do not, a kept deposit is taxed differently from a gift voucher, and the day you register, your carefully built price list silently loses one eleventh of every sale unless you act.

This guide walks through how GST actually works for an Australian hair salon in 2026: when registration becomes compulsory, what counts as GST turnover, what crossing the line does to your prices, how deposits, cancellation fees and vouchers are treated, what you can claim back, and how the BAS cycle works once you are in. It is written by the team behind ViteUneCoupe, a free online booking system for hair salons with 0% commission, and one honest note up front: ViteUneCoupe keeps your appointment and service records tidy, but it is not accounting software and it does not calculate, report or lodge GST.

The usual caveat applies. This is general information, not tax advice. The figures below were checked on ato.gov.au and business.gov.au in October 2026; rules change, and your structure matters, so confirm anything you act on with your accountant.

When does a hair salon have to register for GST?

Registration is compulsory once your GST turnover reaches A$75,000, and you must register within 21 days of becoming aware you will cross the line, per the ATO's GST registration rules and business.gov.au's GST registration guidance (both checked in October 2026). Three details in that sentence catch salon owners out.

First, the test is rolling, and it looks both ways. Your current GST turnover is this month plus the previous 11 months; your projected GST turnover is this month plus the next 11. You meet the threshold when either reaches A$75,000, so a salon that just signed two new rent-a-chair stylists can be caught by the projection before the money has even arrived. The forward test also works in your favour: if a one-off spike pushes your past 12 months over the line but you can genuinely show the next 12 will stay under, you may not have to register. That is exactly the kind of judgement call to make with an accountant, in writing.

Second, it is turnover, not profit. A salon taking A$80,000 a year and barely breaking even after rent, stock and wages is over the threshold; profitability is irrelevant.

Third, registering late is expensive. If you should have registered and did not, the ATO can backdate your registration and expect GST on the sales you made since the date you were required to register, even though you never charged it to clients, with penalties and interest on top. One eleventh of months of takings, out of your own pocket, is a painful way to learn the rolling test. If you are anywhere near A$65,000 on a rolling basis, start checking the figure monthly.

If you are still at the planning stage, GST is only one registration among several; our step-by-step guide to opening a hair salon in Australia puts it in order alongside the ABN, the council and the insurance.

What counts as GST turnover for a salon

GST turnover is your gross business income, excluding the GST itself, not your profit. For a hair salon it typically includes:

hairdressing services: cuts, colour, blow-dries, treatments, extensions. There is no GST-free category for hairdressing; services are taxable at the standard 10%;
retail sales: shampoo, styling products and anything else that crosses the front desk;
chair or station rent you charge self-employed stylists.

That last line is the one owners miss. A salon taking A$60,000 in services, A$6,000 in retail and A$12,000 in chair rent has a GST turnover of A$78,000 and must register, even though the services alone sit comfortably under the line. The same arithmetic applies to a stylist on the road: the A$75,000 test is identical for a mobile hairdressing business in Australia, where a busy round crosses it faster than most people expect.

Will your salon cross A$75,000? A worked example

A deliberately simplified example, with every assumption labelled, to show how quickly the threshold arrives. Suppose a two-chair salon where:

both chairs are booked an average of 5 clients per day each;
the average ticket is A$85 (a mix of cuts and colour);
the salon trades 5 days a week, 48 weeks a year.

That is 2 x 5 x A$85 x 5 x 48 = A$204,000 a year. Even a single chair at that pace turns over A$102,000. A conventional salon with full-time chairs is simply a GST-registered business; the only real question is registering before opening or shortly after.

The threshold genuinely matters for the smaller operations: a solo stylist working part-time, a home salon, a renter building her book. At 20 clients a week and a A$72 average ticket over 48 weeks, turnover is A$69,120, under the line; raise the average ticket to A$80 and it becomes A$76,800, over it. If your diary and your price list put you anywhere near that zone, the rolling check needs to be a monthly habit, not an annual surprise.

What registration does to your price list

Here is the part that stings in a labour business. Your clients are consumers, so they cannot claim the GST back, and your biggest cost is labour, which carries no GST for you to claim either. Registration therefore lands mostly on you or your clients, and because Australian Consumer Law requires displayed consumer prices to be GST-inclusive, there is no "plus GST" line to hide behind: the number on your menu is the number at the till.

Take a A$80 cut and blow-dry, in a simplified, hypothetical example:

You keep the menu at A$80. The price is now GST-inclusive, so A$7.27 of it (one eleventh) is GST and you keep A$72.73. Your revenue on that appointment just fell by 9.1%, and since your costs have not moved, the hit to profit is larger.
You pass it all on. The service becomes A$88. Clients see a 10% rise overnight, while the unregistered solo stylist nearby still charges A$80.

Most salons that cross the threshold land in between: a staged, explained price rise planned months before registration, not announced the week it takes effect. Model it before you cross, not after. Our guide to how Australian hair salons set their prices covers the chair-hour maths and the single-price display rules, and the smartest move of all is the one from the opening guide: if you know you will register, build the menu GST-inclusive from day one so there is never a visible jump.

GST on chair rent

If you rent chairs to self-employed stylists, two GST consequences follow. The rent counts towards your A$75,000 GST turnover, and once you are registered (or required to be), you are liable for GST on the rent you charge, as the ATO's guidance on leasing and renting commercial premises sets out (checked in October 2026).

The good news compared with charging consumers: if your renter is herself GST-registered, she can generally claim that GST back as an input tax credit, so between two registered businesses the tax washes through and the invoice just has to be done properly. If she is under the threshold and unregistered, the GST on the rent is a real cost to her, which is worth both sides understanding before the agreement is signed. The GST line is only one clause of many; our full guide to rent-a-chair arrangements in Australian hair salons covers the contractor test, the agreement and who owns the clients.

GST on kept deposits, cancellation fees and gift vouchers

Three salon-specific transactions where the GST timing is not obvious:

Kept deposits. A booking deposit is not consideration while it just sits against the appointment, but the moment it is forfeited because the client failed to show, GST applies in the period of the forfeiture. Cancellation fees are treated as consideration connected with a supply too, so a GST-registered salon should price both knowing roughly one eleventh belongs to the ATO. The rulings and the paper trail are covered in our guide to cancellation policies and deposits for Australian hair salons.
Gift vouchers for a dollar amount. A voucher redeemable for a reasonable choice of your services ("A$100 to spend at the salon") is a face value voucher: per the ATO's GST and vouchers guidance (checked in October 2026), you account for GST when it is redeemed, not when it is sold. If a voucher expires unredeemed and you write the unused amount back to income, you make an increasing adjustment of one eleventh of the unredeemed balance on that period's BAS.
Vouchers for a specific service. A voucher for one named service ("one balayage package") is not a face value voucher, and GST is accounted for when you sell it. Same salon, same till, opposite timing: tell your bookkeeper which kind you sell.

Input tax credits: the GST you get back

Registration is not all outgoing. A registered salon can generally claim back the GST included in the price of things bought for the business: colour and backbar stock, retail stock, equipment, the commercial rent if your landlord charges GST, utilities, and software subscriptions. Two mechanics matter:

For any purchase over A$82.50 including GST, you need a tax invoice to claim the credit, and credits generally expire four years after the due date of the earliest BAS in which you could have claimed them, per the ATO's claiming-GST-credits rules (checked in October 2026). A shoebox of EFTPOS slips is not a tax invoice; ask suppliers for the real thing and file it.
Purchases that are partly private (the car, the phone) are claimable only for the business portion.

For a labour-heavy salon those inputs are a modest share of turnover, which is why hairdressing feels GST harder than retail does, but they are far from nothing in a colour-heavy business. One line to check on your software stack: an overseas vendor billing from abroad may or may not show Australian GST on its invoice, and what you can claim differs accordingly, a wrinkle our breakdown of the real cost of salon software in Australia flags and your accountant can settle in minutes.

BAS: cycles, Simpler BAS and cash versus accruals

Once registered, you report and pay GST on a business activity statement (BAS). For a salon the practical picture, per the ATO's quarterly GST reporting and BAS due dates pages (checked in October 2026):

Quarterly is the default below A$20 million of turnover, which is every hair salon. The standard due dates are 28 October, 28 February, 28 April and 28 July; lodging through a tax or BAS agent usually buys extra time.
Monthly is optional below A$20 million. Some owners prefer twelve smaller payments to four lumpy ones; it is a cash-flow choice, not an obligation.
Annual reporting exists only for voluntary registrants: if you registered by choice and your turnover is still under A$75,000, you can lodge a single annual GST return instead.

Two simplifications work in your favour. Simpler BAS is the default GST reporting method for businesses under A$10 million: you report just three numbers, total sales (G1), GST on sales (1A) and GST on purchases (1B), per the ATO's GST reporting methods page. And below A$10 million you can account for GST on a cash basis: GST is reported in the period the money actually moves, which for a salon paid at the basin matches reality and protects cash flow. A salon with chair-rent invoices paid late has a genuine choice to discuss with its accountant.

A simplified quarter, assumptions labelled: takings of A$52,800 including GST mean 1A is A$4,800; business purchases of A$7,700 including GST mean 1B is A$700; the BAS payment is A$4,100. The arithmetic is never the hard part. Having the takings split cleanly by services, retail and chair rent, with dates, is.

When voluntary registration makes sense

Below A$75,000 registration is optional, and for most small salons the default answer is no: your clients cannot claim the GST back, so registering voluntarily either raises your prices by 10% or cuts your margin by 9.1%, in exchange for input credits that rarely cover the gap in a labour business. Note that a voluntary registration generally commits you to staying registered for at least 12 months.

The exceptions are real, though:

A big fit-out ahead of opening. Basins, plumbing, chairs, mirrors and shopfit all carry GST; registering before the spend lets you claim it back during the months you have costs and little revenue.
You will cross the threshold within the year anyway. Registering from day one means the menu is built GST-inclusive once, with no visible price jump later. A salon with staffed chairs is in this category almost by definition.
Your income is mostly chair rent to registered renters. Business clients can claim your GST back, so registration costs them nothing and unlocks your own credits.

If none of those apply, staying under and unregistered is a legitimate position, not a dodge. What is not legitimate is hiding takings or splitting one business into two to stay under the line; that is evasion, and the rolling test plus data matching makes it a bad bet.

Keeping the records that make GST painless

Every GST obligation above leans on the same unglamorous foundation: knowing, at any moment, what the salon has actually taken, split by services, retail and chair rent. Salons that live in a paper diary tend to discover they crossed the threshold months ago, when the GST is owed anyway and the prices never carried it.

Three habits cover most of it:

One source of truth for appointments. Every appointment with its service, price and date in one calendar, not spread across a paper diary, a phone and a stylist's memory. An online booking system gives you that automatically, because every booking arrives with a service and a price attached.
A monthly rolling total. Once a month, add the last 12 months of takings and sanity-check the next 12. Ten minutes, and the 21-day clock never starts without you knowing.
Proper tax invoices filed from day one, because the credits you cannot document are credits you lose.

On the software side, ViteUneCoupe's free plan gives a hair salon unlimited online bookings with 0% commission, a personalised booking page, a service catalogue with prices, staff schedules and a client database, which is exactly the tidy appointment trail your bookkeeping and your BAS start from. The Standard plan, from 29 € excluding tax per month with no commitment, adds automatic email confirmations, reminders and thank-you emails plus calendar sync. Three honest notes for Australian owners: the subscription is billed in euros, so the amount on your card statement moves with the exchange rate and your bank may add a foreign transaction fee; reminders are email only, not SMS; and ViteUneCoupe does not process payments and is not an accounting package, so it will not compute, report or lodge your GST. For that you need accounting software and, ideally, an accountant who knows salons.

Frequently asked questions

Do hairdressers charge GST on haircuts in Australia?

Only if the business is registered for GST. Registration is compulsory once GST turnover reaches A$75,000, measured on both the past 12 months and the projected next 12; below that it is optional. A registered salon charges 10% GST on services, retail products and chair rent, and the displayed consumer price must include it.

Does chair rent count towards the A$75,000 threshold?

Yes. Rent you charge self-employed stylists is part of your GST turnover, and once registered you are liable for GST on it. A GST-registered renter can generally claim that GST back, so between registered businesses it washes through; for an unregistered renter it is a real cost.

Do I pay GST on a kept deposit or a gift voucher?

Deposits attract GST when they are forfeited, in the period the client failed to show, not when the money arrives. A dollar-amount voucher redeemable across your services attracts GST when redeemed, with an increasing adjustment if it expires unused; a voucher for one specific service attracts GST when sold.

What happens if I register for GST late?

The ATO can backdate your registration to the date you were required to register and expect one eleventh of the sales you made since, even though you never charged it to clients, plus penalties and interest. Checking the rolling 12-month figure monthly is the cheap insurance.

Is it better to keep my salon under A$75,000?

Staying legitimately under the threshold is a valid position for a solo or part-time business, since registration makes consumer services effectively 10% dearer or 9.1% less profitable. But a salon with full-time chairs will cross the line quickly, and hiding takings or splitting the business to avoid registering is tax evasion, not planning. If you are near the line, model the crossing with your accountant.

GST for hair salons in Australia: the A$75,000 threshold, BAS and what registration changes