Getting GST set up correctly on Shopify isn’t complicated once you understand the moving parts, but it’s easy to get subtly wrong in ways that don’t show up until tax time, prices displayed incorrectly, GST charged when it shouldn’t be (or not charged when it should), or the wrong amount showing on customer invoices. This guide walks through how it actually works in Shopify’s admin, without pretending to replace advice from your accountant on the tax side.
This post covers the mechanics of Shopify’s tax settings for Australian GST. It’s not tax advice, talk to your accountant or bookkeeper about your specific registration obligations and reporting, but use this as the guide to what to actually click in Shopify once you know your obligations.
Do You Need to Register for GST First?
Before touching Shopify’s settings, you need to know your GST registration status, which is a decision governed by the ATO, not Shopify. In general terms, Australian businesses are required to register for GST once their GST turnover reaches the ATO’s registration threshold (commonly cited as $75,000 for most businesses), though some business types have different rules or can register voluntarily below that threshold. If you’re not sure where you stand, this is a conversation for your accountant before it’s a Shopify settings question, getting the underlying registration decision right matters more than any setting in the admin.
Once you know whether (and how) you’re registered, Shopify’s job is to correctly calculate, display, and report GST on your sales in line with that registration.
Setting Up GST in Shopify’s Tax Settings
Australian GST is configured through Settings > Taxes and duties in your Shopify admin.
1. Set your base region correctly. Under the Australia region in tax settings, Shopify allows you to set a GST rate that applies across your Australian sales. Shopify generally keeps its default regional tax rates up to date with standard GST, but always verify the rate shown matches the current standard GST rate rather than assuming it’s automatically correct at the moment you check.
2. Decide whether prices are entered inclusive or exclusive of GST. This is one of the most common setup mistakes. Under Settings > Taxes and duties > Tax settings, there’s a setting for whether your product prices already include tax. Australian consumers expect to see GST-inclusive pricing on the storefront (this is standard practice and generally expected under Australian Consumer Law for advertised prices to consumers), if this setting doesn’t match how you actually entered your product prices, customers will either see incorrect totals at checkout or you’ll be silently absorbing or over-charging GST on every sale.
3. Confirm GST displays correctly at checkout. Depending on your settings, checkout can show tax as included in the displayed price (common for B2C) or as an added line item (more common for B2B/wholesale where the buyer is often GST-registered themselves and wants to see the tax separately). Which one is right depends on who you’re selling to, if you run both a retail storefront and a wholesale channel, this may need separate handling for each.
4. Check product-level tax overrides only where genuinely needed. Most products should just inherit the standard regional GST rate. Overrides are relevant for specific product categories that may be GST-free under Australian tax law (certain food items, health products, and a few other categories have GST-free status), this is a tax classification question for your accountant, but once you know a product is GST-free, Shopify lets you set that at the product level so it doesn’t get taxed like everything else in your catalogue.
GST on Shipping
Shipping charges in Australia generally follow the tax treatment of the goods being shipped, if the goods are taxable, shipping is typically taxable too, and if the goods are GST-free, shipping associated with them is often treated the same way. Confirm your shipping rates are configured consistently with your product tax settings rather than left on a default that doesn’t match your actual products.
International Sales and GST
If you sell beyond Australia, or you’re an overseas-based merchant selling into Australia, there’s an extra layer worth understanding:
- Australia applies GST to low-value imported goods (broadly, goods valued under a certain threshold, commonly referenced as under AUD $1,000) sold to Australian consumers by non-resident businesses, with the GST collected at the point of sale rather than at the border. If you’re a non-Australian merchant selling into Australia, this affects how you need to configure tax collection for Australian customers specifically.
- If you’re an Australian merchant selling internationally, GST generally doesn’t apply to exported goods in the same way, but destination countries may have their own tax obligations (VAT in the UK/EU, for example), Shopify’s Markets feature can help manage this per-region, but the underlying tax registration obligations in each destination are separate questions from the Shopify configuration itself.
This is a genuinely complex area once you’re selling cross-border, and it’s one of the places where getting advice from an accountant who understands international indirect tax, alongside correct Shopify configuration, matters more than guessing.
Getting GST Data Out of Shopify for BAS Reporting
Once GST is configured correctly, the next practical question is getting clean data out of Shopify to support your Business Activity Statement (BAS) reporting. Shopify’s Analytics > Reports section includes sales and tax reports that break down GST collected over a given period, which is generally the starting point for reconciling against what you report to the ATO.
A few things worth checking here specifically:
- Reconcile Shopify’s reported GST against your accounting platform, if you’re syncing orders into Xero, MYOB, or another system via an integration, a misconfigured sync can duplicate or drop transactions, which throws off both your GST reporting and your broader financial reporting. This is worth checking soon after any new integration goes live, not just at BAS time.
- Check refunds and partial refunds are correctly reducing reported GST, a refunded order should reduce the GST you’ve collected accordingly, and it’s worth spot-checking a handful of refunded orders against your reports to confirm this is flowing through correctly.
- Keep an eye on GST-free product sales specifically, if you have a mixed catalogue of taxable and GST-free items, your reporting needs to clearly separate the two, and this depends entirely on those products being correctly flagged at the product level as covered above.
None of this replaces your accountant’s role in actually preparing and lodging your BAS, but clean, correctly configured Shopify data makes that process considerably faster and less error-prone than trying to untangle it after the fact.
Common Mistakes to Check For
- Prices set as tax-exclusive in Shopify while advertised as tax-inclusive on marketing materials, creates a mismatch between what customers expect to pay and what they’re charged.
- GST not applied consistently across sales channels, if you sell via your Shopify storefront and also via a marketplace channel synced into Shopify, check tax is calculated correctly on both, since channel-specific settings can drift out of sync.
- Forgetting to update tax settings after a business structure change, if your GST registration status changes (you cross the threshold, or deregister), your Shopify settings need to be updated to match; Shopify won’t do this automatically because it doesn’t know your registration status.
- Treating Shopify’s default settings as correct without checking, Shopify provides sensible defaults for Australian GST, but “sensible default” isn’t the same as “correct for your specific product mix and registration status.” Always verify against your own circumstances.
Most of these mistakes are invisible in day-to-day store operation, orders still process, customers still check out, which is exactly why they tend to go unnoticed until a BAS reconciliation or an accountant’s review surfaces a discrepancy. A periodic check of your tax settings, particularly after any change to your product range, business structure, or sales channels, catches this early rather than after months of incorrectly calculated GST have already gone out the door.
A Practical Setup Checklist
- Confirm your GST registration status and obligations with your accountant first
- Go to Settings > Taxes and duties and check the Australia GST rate is current
- Confirm whether your product prices are entered tax-inclusive or tax-exclusive, and that the setting matches
- Check any GST-free products are correctly flagged at the product level
- Confirm shipping tax treatment matches your product tax treatment
- If selling internationally, review Shopify Markets tax settings per region
- Test a sample checkout as an Australian customer to confirm the GST amount displayed is correct
- Review after any business structure or registration status change
Frequently Asked Questions
Does Shopify automatically calculate GST for me?
Shopify can calculate GST automatically based on your tax settings once configured correctly, but it doesn’t know your GST registration status, which products are GST-free, or your specific obligations, those inputs come from you (ideally confirmed with your accountant), and Shopify applies the calculation based on what you’ve set up.
What GST rate should I set in Shopify?
Standard GST in Australia is broadly applied at a consistent rate across most goods and services, but always verify the current rate against ATO guidance rather than assuming a figure, since tax settings should be checked periodically rather than set once and forgotten.
Do I need to charge GST if I’m not registered yet?
No, if you’re not registered for GST, you generally shouldn’t be charging it, and your Shopify tax settings should reflect that (effectively no GST applied) until you register. This is a common point of confusion for newer stores approaching the registration threshold.
How do I handle GST for wholesale or B2B customers?
B2B customers who are themselves GST-registered often expect to see GST itemised separately (a proper tax invoice) rather than baked into a single displayed price, which is different from typical consumer-facing display. If you run a wholesale channel through Shopify B2B, tax display and invoicing usually need separate configuration from your retail storefront.
Where do I go if I’m not sure whether a product is GST-free?
That’s a tax classification question best answered by your accountant or the ATO’s published guidance on GST-free goods, once you know the answer, applying it correctly in Shopify (via product-level tax settings) is straightforward.
Next Step
If your Shopify tax setup needs a proper review, especially if you’re expanding into wholesale, international sales, or just aren’t confident it’s configured correctly, a Shopify GST setup guide is the place to start, or book a call to get it checked properly alongside the rest of your store configuration.
