Most sole traders sort out their ABN in an afternoon and then spend three months getting paid by bank transfer, chasing “did you get my invoice?” emails, and reconciling the lot at BAS time. Taking payments online fixes the chasing. It also creates a new set of records, the ATO will want to see, and a few decisions that are much cheaper to get right in month one than in month twelve.
This guide walks through the setup in order: the registrations, the choice of how to take money, what the fees and foreign currency do to your books, and the records to keep so lodgement stays a small job.
Key Takeaways:
- You need an ABN before you can invoice or set up most payment tools, and GST registration becomes compulsory once your GST turnover reaches $75,000.
- Card and subscription payments cost a percentage plus a fixed amount per sale; the fees are a deductible business expense, so record them, don’t ignore them.
- If you sell to overseas customers or use a platform that charges in US dollars, your records still need to be in Australian dollars, so capture the conversion at the time of each transaction.
- Whatever tool you use, export the transaction and payout history every quarter and keep it with your BAS records.
Get the registrations in the right order
Start with the ABN. Payment platforms, invoicing tools and most clients will ask for it, and a sole trader without one has tax withheld from payments at the top rate. The application is free through the Australian Business Register and often approved instantly; if yours isn’t, our guide on how long it takes to get an ABN covers the delays and what causes them.
Then decide on GST. Registration is compulsory when your GST turnover, meaning gross income from all your businesses minus GST, reaches $75,000 or more, or when you start a new business and expect to hit that figure in the first year. It’s also compulsory regardless of turnover if you provide taxi, limousine or ride-sourcing services. Below the threshold, registration is optional, and the trade-off is real: registering lets you claim GST credits on your expenses but adds 10% to your prices for Australian customers and a BAS to lodge each quarter.
Make that decision before you set prices, because switching later means either absorbing the GST or explaining a 10% increase to every client.
Choose how you’ll take money
There are three ways for a sole trader to get paid online, and most end up using two of them.
Invoices paid by bank transfer. Free, familiar, and slow. You control the terms, but you also chase the money, and every late payment is a cash-flow hole you fill yourself.
Card payments through a checkout link. You set a price, share a link, the client pays by card or wallet, and the money lands in a balance you pay out to your bank. This suits one-off work, deposits and anything where waiting for a transfer costs you the job.
Recurring billing. For retainers, ongoing services or anything you charge monthly, a subscription plan charges the client’s saved card on a schedule. The chasing disappears, and so does the monthly “reminder: invoice attached” email.
Consultants and service businesses that take payments on Whop, a payment platform with checkout links, subscription billing and payouts in one dashboard, typically use the second and third together: a link for the first project, a monthly plan once the client stays. The same pattern works on any platform that offers both. The point is to match the method to the work, because a retainer billed by manual invoice is a monthly admin task you’ve chosen to keep.
Understand what the fees do to your numbers
Card payments cost money, and the cost has a shape: a percentage of the sale plus a fixed amount per transaction. On Whop, for example, the published rate is 2.7% plus 30 cents per domestic card payment, with 1.5% more for international cards and 1% more when currency conversion applies. Other platforms sit in a similar range with different splits.
Three consequences for a sole trader:
- Small sales are expensive. The fixed part of the fee is the same on a $20 sale as on a $2,000 one. If you sell low-priced items, price them with the fee in mind or bundle them.
- The fees are deductible. They’re a cost of running the business, so record them as an expense. Most people forget, because the fee is deducted before the money arrives and never shows up as a payment out of the bank account.
- Your revenue is the gross figure. If a client pays $1,000 and $27.30 is deducted in fees, your income for tax purposes is $1,000 and your expense is $27.30, not income of $972.70. The distinction matters for the GST turnover calculation as well as for your deductions.
Handle foreign currency properly
Plenty of Australian sole traders sell to clients in the US, the UK and Asia, and some payment platforms publish their fees in US dollars regardless of where you are. Whop’s fee schedule, for instance, is in USD, and payouts to a local bank outside the US carry a fee that varies by country. Neither is a problem, as long as your records reflect it.
Two habits keep this clean. First, record every transaction in Australian dollars, using the exchange rate at the time of the sale or payout, and note the rate you used. Second, treat the difference between what the customer paid and what arrived in your account as two things: the platform fee, which is an expense, and the currency movement, which your accountant will want to see separately.
If you’re registered for GST, note that supplies to overseas customers have their own GST treatment and it isn’t always the same as a domestic sale. Check the ATO’s guidance for the type of service you provide before you assume 10% applies, or ask a registered agent.
Keep the records the ATO expects
Online payments generate more records than bank transfers, which is good news at audit time and only a problem if you never export them. Once a quarter, before you lodge, pull three things from your payment platform and file them with your BAS:
- The transaction list for the quarter, with gross amounts, fees and dates.
- The payout history, so every deposit in your bank account can be matched to the sales behind it.
- Any refunds and disputes, because a refunded sale reduces your income and your GST in the period it’s refunded, not the period it was sold.
Most platforms let you download these as a spreadsheet, and several will send every payment event to your accounting software automatically. Set that up in month one. The quarter you don’t is the quarter you rebuild it from bank statements. The same discipline our BAS filing best practices guide recommends for receipts applies to payment exports: prepare across the quarter, not the night before.
Bringing it together
Get the ABN, decide on GST before you set prices, then pick the payment method that matches the work: links for one-off jobs, recurring plans for retainers, transfers for the clients who insist. Record gross revenue and fees separately, convert foreign amounts to Australian dollars at the time of each transaction, and export the platform’s records every quarter. Done in that order, online payments take the chasing out of getting paid without adding anything to BAS time except a spreadsheet you already have.
FAQs
1. Do I need an ABN to take card payments online?
In practice, yes. Payment platforms and invoicing tools ask for it during setup, and without an ABN clients may withhold tax from your payments. Apply through the Australian Business Register before you set up any payment tool.
2. When do I have to register for GST?
When your GST turnover reaches $75,000 or more, or when you start a business and expect to reach that in the first year. Ride-sourcing and taxi services must register regardless of turnover. Below the threshold, registration is optional.
3. Are payment platform fees tax deductible?
Yes. They’re a business expense. Record the gross sale as income and the fee as an expense, using the transaction export from your platform, since the fee is usually deducted before the money reaches your bank.
4. My payment platform charges fees in US dollars. Does that matter?
Not for the fees themselves, but your records must be in Australian dollars. Convert each transaction and payout at the rate on the day and note the rate. Keep the platform fee and the currency movement as separate lines.
5. How often should I export my payment records?
Quarterly at a minimum, before you lodge your BAS, and monthly if your volume is high. Connect the platform to your accounting software if it supports it, so the records arrive as they happen instead of as a quarterly reconstruction.
6. Should I charge GST to overseas customers?
Not automatically. Supplies to customers outside Australia have their own GST rules that depend on what you’re supplying and where the customer is. Check the ATO’s guidance for your type of service or confirm with a registered tax agent before deciding.