GST on invoices isn't income, you collect it and pass it on with your BAS.
The formula (and why "260 days" is a fantasy).
Day rate = (target income + business costs) ÷ billable days. The number people get wrong is the last one: a working year has about 260 weekdays, but after leave, public holidays, sick days, quoting, admin, and the gaps between jobs, 200–230 genuinely billable days is the realistic band for most freelancers and tradies. Divide by 260 and you've built a 15% pay cut into your rate before the year starts.
What belongs in "business costs".
- The obvious: insurance, tools and equipment, vehicle running costs, software, phone and data, licences and tickets.
- The forgotten: super you should be paying yourself, equipment replacement, training, accounting fees, and unpaid time you can't bill but must fund.
Costs go in ex-GST if you're registered (the GST in them comes back as credits); GST-inclusive if you're not.
The GST line on your invoice.
If you're registered, your quoted rate gets 10% GST added on the invoice: money you collect for the ATO, not income. Business clients don't blink at it (they claim it straight back), which is why most subbies register early. And watch the calculator's threshold note: a $522 ex-GST day rate at 220 days is $115,000 a year: well past the $75,000 registration line.
Quick answers.
How many billable days should I assume in a year?
200–230 is realistic for most freelancers and tradies once leave, public holidays, sick days, admin and gaps between jobs are subtracted from the ~260 weekdays. Using 260 quietly underprices you by about 15%.
Do I add GST on top of my day rate?
If you're GST-registered, yes, quote ex-GST to businesses and add 10% on the invoice. The GST isn't income; you collect it and remit it with your BAS. If you're not registered, you don't add GST at all.
Should my day rate include superannuation?
Nobody pays it for you when you're self-employed, so yes, build the super you intend to pay yourself into the target income or the costs line. Otherwise your 'same as a salary' rate is quietly 11-12% lighter.
My day rate puts me over $75,000: what now?
Full-time work at professional or trade day rates almost always does. GST registration becomes compulsory once your rolling 12-month turnover crosses $75,000: registering when you start, on your own terms, beats discovering it mid-year.
Related: GST for tradies and subcontractors · GST threshold calculator · All business calculators
Rate set, invoices coming? Get the GST side ready.
Lodged by Registered BAS Agent 25972850 · tax deductible · free help on 1800 546 526.