You’ve just received your first contract and might be surprised to see that the Goods and Services Tax (GST) receives a mention… or a few! So, what’s it doing there? Confused?
GST is a 10% tax placed on most goods, services and consumables sold in Australia, and is designed to help the government raise capital which is then reinvested back into society.
In most instances, dental treatments (and other health care services) are GST exempt. However, other services you engage with, such as lab fees or service fees, could attract GST. You are usually liable to pay these fees to the practice if you’re working as a Services and Facilities (SFA) or Independent Contractor Agreement (ICA). In this scenario, the practice (or principal) usually expects you to bear the GST liability, meaning you can deduct the GST from your total billings.
We’ve compiled a small list to help you navigate your way through GST obligations.
1. Take the time to understand with your employer who is liable for GST and who can claim GST deductions.
2. Get clear on how and when the GST will be deducted from your billings. It’s always best to have this agreement clearly outlined in your contract.
3. Make sure there’s no grey area in your understanding. The Savvy Grad is well versed in GST, please reach out if you need tailored advice.
4. Utilise your trusted accountant or financial advisor for further information on how GST affects you.
To avoid any nasty mishaps come tax time, it is imperative that you understand your contractual obligations and financial implications around GST. Small mistakes can quickly become large headaches, so best to get acquainted and avoid complications in the future.
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