A surcharge takes the GST treatment of whatever it's added to. The ATO's ruling GSTR 2014/2 treats a surcharge as part of the consideration for the underlying sale: taxable meal, taxable surcharge (GST is 1/11 of the surcharged total); GST-free sale, GST-free surcharge; and one surcharge across a mixed bill is apportioned on any fair and reasonable basis. Since 1 October 2026 merchants can no longer surcharge eftpos, Mastercard or Visa cards at all, but weekend and public-holiday surcharges, booking fees and service fees are untouched and follow the same rule. Tips run the other way: a genuinely voluntary tip passed on to staff isn't consideration for the sale, so it carries no GST and never touches your BAS, while a pre-set service charge, a tip the business keeps, or a rideshare tip inside the fare is just more price, with GST to match.
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The rule: a surcharge is just more price
GST never sees a surcharge as a thing in its own right. The ruling's logic is that a surcharge a merchant adds to a sale has a sufficient nexus with that sale, so it forms part of the consideration: more price, under a different name. Everything else follows from that. If the underlying sale is taxable, the surcharge is taxable: the ruling's own example is a $55 shirt with a $1.65 card surcharge, making the price $56.65 and the GST 1/11 of $56.65. If the sale is GST-free or input-taxed, the surcharge inherits that too: a surcharge on a GST-free sale carries no GST, and nothing about calling it a "fee" changes that.
One payment often covers several things at once, and the ruling handles that the obvious way: where a single surcharge relates to a basket of taxable and GST-free items together, you apportion it across the parts using any fair and reasonable method: pro rata to the values is the usual one. The same follow-the-supply logic also works in reverse: a surcharge for paying something that isn't a supply at all, like an Australian government tax or fee that sits outside the GST system, takes the same treatment as the payment it attaches to and carries no GST. The quick map:
| The add-on | What the GST does |
|---|---|
| Surcharge or service fee on a taxable sale: the café bill, the tradie's card fee of old | Taxable: GST is 1/11 of the surcharged total |
| Surcharge on a GST-free sale: basic food delivered, a GST-free health service | GST-free: the surcharge inherits the treatment |
| One surcharge across a mixed basket of taxable and GST-free items | Apportioned: any fair and reasonable method, usually pro rata |
| Weekend or public-holiday surcharge on a restaurant bill | Taxable: dine-in food and drink is taxable, so the percentage is too |
| Fee for paying a government charge that sits outside GST | No GST: it follows the payment it attaches to |
| Voluntary tip, passed on to staff | No GST, not consideration for the sale, never on the BAS |
| Tip the business keeps, pre-set "tip" or compulsory service charge | Taxable for a registered business: it's just price |
The October 2026 card-surcharge ban: what changed, and what didn't
For twenty years the classic surcharge question was the card fee at the terminal. From 1 October 2026 it mostly isn't a question anymore: under the RBA's reforms, the designated card networks' no-surcharge rules ban merchants from surcharging eftpos, Mastercard and Visa (credit, debit and prepaid alike, including internationally issued cards) and American Express, UnionPay and PayPal chose to drop surcharging in the same week (PayPal from 5 October). Compliance sits with the card networks rather than the RBA, and pricing that misleads customers is the ACCC's department. If you've absorbed the old surcharge into your prices, the GST does what it always does: 1/11 of the new price of each taxable sale, nothing special to report. Surcharges you charged before 1 October were correctly treated at the time, so past BAS lodgments don't change.
What the ban doesn't touch is everything this page is about from here down. The RBA's own FAQ is explicit that the changes don't apply to weekend and public-holiday surcharges, booking fees or service fees, to a fee you apply regardless of how the customer pays, or to surcharges on non-card payment methods like bank transfer, which it doesn't regulate, and taxi-fare surcharging stays under state and territory rules. Every one of those survivors is ordinary consideration, so the follow-the-supply rule above decides its GST. A "venue fee" added to every order is part of the price of the order; a booking fee on taxable tickets is taxable; and all of it lands on the BAS the same way the underlying sale does.
Holiday surcharges and service fees: the percentage rides the bill
A 10% Sunday surcharge is a percentage of the bill, and for GST it is simply more of the bill. In a café or restaurant that makes it easy: food and drink consumed on the premises is taxable whatever it is, so the surcharged total is taxable end to end and the GST is 1/11 of it. A $100 table on a public holiday with a 15% surcharge is a $115 sale carrying $10.45 of GST: you don't work out GST on the food and then look at the surcharge separately, because the surcharge was never separate.
The apportionment case arrives the moment the bill underneath is mixed. A caterer whose invoice spans GST-free basic food and taxable prepared platters, a grocer adding a public-holiday delivery surcharge to an order that's half GST-free staples: there the surcharge splits across the parts on a fair and reasonable basis, typically in proportion to their values, exactly as one card surcharge across a mixed basket did under the ruling. Two housekeeping notes ride along: the surcharge belongs on the tax invoice as part of the price, and under consumer law a menu that surcharges particular days has to say so. And because every surcharge and service fee is consideration, it all counts toward the $75,000 registration threshold at full value.
Tips: voluntary and passed on means invisible to GST
Tips are the one add-on on the receipt that can escape GST completely, because a genuine tip was never consideration for the sale. The ATO's position has two conditions, and both have to hold. First, the payment is genuinely voluntary: the customer decides whether to pay and how much, which a tip jar, a handwritten extra on the bill and a tip screen all satisfy as long as zero is a real option. Second, the money is passed on to the staff it was meant for. Meet both and the tip doesn't attract GST, doesn't appear on your BAS, and doesn't count toward GST turnover: it was the customer's gift to your people, routed through your till. Keep records showing the pass-through: the register tape that splits tips from takings, and the ledger showing the money going out to staff, are what make the treatment defensible.
Break either condition and the amount snaps back to being price. Tips the business keeps are business takings, and for a registered business 1/11 of them is GST. Anything non-voluntary (a pre-set "tip", a compulsory service charge, an automatic percentage for large tables) is subject to GST no matter what the docket calls it, which is the same label-blindness the surcharge rule runs on. And one industry sits under a special rule of its own: in ride-sourcing, the ATO treats the full fare charged to the rider (including tips, surge and booking amounts paid through the platform) as the driver's fare income, with GST on the lot, as our Uber BAS guide walks through. A $30 fare with a $3 in-app tip is $33 of consideration and $3 of GST, platform commission notwithstanding.
Quick answers
Is there GST on a card surcharge?
When one is legally charged, yes, and it follows the sale underneath. GSTR 2014/2 treats the surcharge as part of the consideration for whatever you sold, so a surcharge on a taxable sale is taxable (GST is 1/11 of the surcharged total), a surcharge on a GST-free sale is GST-free, and a surcharge covering a mixed basket is split across the parts on any fair and reasonable basis. The bigger news is that from 1 October 2026 merchants can no longer surcharge eftpos, Mastercard or Visa cards at all, so for most businesses the question now only arises for the add-ons that survived: holiday surcharges, booking fees, service fees and surcharges on non-card payment methods.
Can my business still add a card surcharge at all?
Mostly no. From 1 October 2026 the designated networks' no-surcharge rules ban surcharging on eftpos, Mastercard and Visa (credit, debit and prepaid, including internationally issued cards) and American Express, UnionPay and PayPal dropped surcharging from the same week voluntarily. What's still allowed: weekend and public-holiday surcharges, booking fees and service fees, a fee you apply regardless of how the customer pays, and surcharges on non-card payments such as bank transfer, which the RBA doesn't regulate. Taxi fare surcharging stays under state and territory rules. Compliance is enforced by the card networks themselves, and pricing that misleads customers is a matter for the ACCC.
Is there GST on a public holiday or weekend surcharge?
It follows the bill it's a percentage of. In a café or restaurant, dine-in food and drink is taxable, so the 10% Sunday surcharge is taxable too: GST is simply 1/11 of the surcharged total. Where the bill mixes taxable and GST-free items (a caterer supplying GST-free basics alongside taxable service, a grocer with a delivery-day surcharge) the surcharge is apportioned across the parts on any fair and reasonable basis, usually pro rata to the values. The surcharge is part of the price for consumer-law purposes too, so menus have to disclose it.
Do tips attract GST?
Not when they're genuinely voluntary and passed on. The ATO's position is that a tip freely given by the customer, collected and handed on to staff, isn't consideration for the sale: it doesn't attract GST, doesn't go on your BAS, and doesn't count toward GST turnover. The conditions matter: the customer must choose the amount freely, and the money must actually reach the staff, with records showing it did. A tip screen suggesting 10/15/20% is still voluntary as long as the customer can pay zero.
What if the business keeps the tips, or adds a pre-set service charge?
Then it's just revenue. Tips the business keeps are business takings: for a GST-registered business, 1/11 of them is GST. And anything non-voluntary (a pre-set 'tip', a compulsory service charge, a percentage added to every table of eight) is part of the price of the meal regardless of what the docket calls it, so it's subject to GST the same way the food is. The label on the line item never decides the treatment; who chose the amount, and where the money ends up, do.
Do rideshare and taxi drivers pay GST on tips?
Yes. The ATO's ride-sourcing guidance is that GST is calculated on the full fare the platform charges the rider (before commission comes out) and tips paid through the platform are part of that fare income, along with surge and booking amounts. A $30 fare plus a $3 in-app tip is $33 of consideration and $3 of GST. Drivers are registered from the first dollar, so there's no threshold to hide behind: see our Uber BAS guide for the whole picture.
Do surcharges and service fees count toward the $75,000 threshold?
Yes: they're part of the price of what you sell, so every holiday surcharge, booking fee and service fee goes into GST turnover at full value. Voluntary tips passed on to staff are the exception: they're not consideration for your sales, so they don't count. If the add-ons are what carries a rolling 12-month figure over $75,000, you have 21 days to register: free through the ATO's own online services, or $119 + GST through our BAS-agent service if you'd rather have it reviewed and lodged for you.
Is there GST on the fee for paying a government charge by card?
No: the follow-the-supply rule works in your favour here. GSTR 2014/2 covers surcharges on payments of Australian taxes, fees and charges: where the government charge itself sits outside the GST system, a surcharge for paying it by card takes the same treatment and carries no GST. The same logic runs a late-payment example in the ruling the other way: a card surcharge on paying a late-payment fee under a credit arrangement attaches to an input-taxed financial supply, so it carries no GST either, but generates no credit.
Related guides: GST on food · GST on discounts and rebates · Uber BAS guide · GST on marketplace sales · When to charge GST · How to calculate GST · Crossing the $75,000 threshold
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