You run a tutoring business. You provide training. You run courses. You teach students every week. Then you send an invoice and wonder: “Do I need to add 10% GST?” This is a common question. And the answer is not always straightforward.
Some education services can be GST-free. Others can be taxable. It depends on the type of education you provide and whether it meets the GST rules.
So let’s make it simple.
Are Education Services GST-Free?
Certain education courses can be GST-free. If the education service qualifies, you generally don’t charge GST to your student.
For example: Course fee: $1,000.
GST: $0.
Student pays: $1,000.
But there is an important point. Not every course, class or training program is automatically GST-free. The course needs to meet the requirements for GST-free education.
What Is a GST-Free Education Course?
GST law recognises certain types of education as GST-free. These can include approved or recognised education courses provided by eligible education providers. Examples can include certain:
- School courses.
- University courses.
- TAFE courses.
- Adult and community education courses.
- English language courses for overseas students.
- First Aid or CPR courses in certain circumstances.
The exact rules depend on the course and the provider. So don’t assume: “I’m teaching students, so my course is GST-free.” The type of course matters.
Schools and Universities
Education provided by schools and universities can generally be GST-free when it meets the relevant requirements.
For example, a school charges: Annual school fees: $10,000.
If the supply is GST-free: GST: $0. The parent pays: $10,000.
The school does not simply add another $1,000 GST because it is a business or organisation.
The education itself can qualify for GST-free treatment.
What About TAFE and Vocational Education?
Certain TAFE and vocational education courses can also be GST-free. This can include recognised courses that lead to qualifications or are otherwise covered by the education rules.
For example, a qualifying course costs: $2,200.
The GST can be: $0.
The student pays: $2,200.
But you need to check whether the particular course and provider meet the requirements. Not every training program is automatically GST-free.
What About Private Tutoring?
This is where things get interesting. Private tutoring can be GST-free in certain circumstances. But the rules are specific. The subject being taught generally needs to be one that is a subject ordinarily taught at a primary or secondary school.
The tutoring also needs to be provided by a suitably qualified person in the relevant circumstances. So if you provide tutoring, don’t simply assume all tutoring is GST-free. Look at the subject. Look at your qualifications. And look at the circumstances in which the tutoring is provided.
A Simple Tutoring Example
Imagine you provide private mathematics tutoring.
You charge: $100 per lesson.
If the tutoring qualifies as a GST-free education service:
Lesson fee: $100.
GST: $0.
Student pays: $100.
You don't add another $10 GST.
But if the service does not meet the requirements for GST-free tutoring, GST may apply if you are registered for GST.
What About Online Courses?
Online education has become very common. You might sell:
- Recorded courses.
- Online classes.
- Training programs.
- Webinars.
- Digital learning programs.
But being an educational product does not automatically make it GST-free. You need to look at the type of course and whether it meets the relevant GST-free education requirements.
For example, a private online course teaching a specialised business skill may not automatically qualify as GST-free education. So don’t use: “It’s an education course = GST-free.” That rule is too broad.
What About Short Training Courses?
Short courses and workshops can have different GST treatment.
For example, you might run a: One-day business workshop.
Fee: $550 including GST.
If the workshop is a taxable supply, the GST included is: $550 ÷ 11 = $50.
The price before GST is: $500.
And the GST is: $50.
Whether a particular course is GST-free depends on the relevant education rules.
What About Professional Training?
Professional training is another area where you need to be careful. Imagine you run a course teaching business owners how to use accounting software. The course costs: $1,100
You might think: “I’m providing education, so there shouldn’t be GST.” Not necessarily. A training course does not become GST-free simply because someone is learning something. You need to check whether it qualifies under the GST education provisions. If it does not, and you are GST registered, the course may be taxable.
What About First Aid and CPR Courses?
Certain first aid and CPR courses can qualify for GST-free treatment when the relevant requirements are satisfied. This can depend on the course being a recognised education course or meeting other specific conditions. So if you run first aid training, don’t simply assume every course is GST-free. Check the exact course and provider requirements.
What About Driving Lessons?
Driving lessons are an interesting example. Teaching someone how to drive is certainly education. But that does not automatically make the service GST-free. GST-free education has specific categories. So if you operate a driving school, you need to check the GST treatment of your services. The fact that you are teaching a skill is not enough on its own.
What About Music Lessons?
Music lessons can also raise questions. You might teach: Piano, Guitar, Singing, Drums. But not every music lesson is automatically GST-free. The GST treatment depends on whether the service falls within the relevant GST-free education rules.
So don’t assume: “It’s a lesson, so it’s GST-free.” Check the actual requirements.
What About Educational Materials?
Education businesses often sell more than just courses. You might also sell:
- Books.
- Workbooks.
- Equipment.
- Learning materials.
- Uniforms.
- Other products.
These items can have their own GST treatment. For example, the course may be GST-free. But a separate product sold to the student may be taxable. So keep course fees and product sales properly separated in your accounting system.
What About Course Materials Included in the Fee?
Sometimes course materials are included as part of the education service. The GST treatment can depend on whether the materials are supplied as part of the GST-free course or are separate supplies. This is why the way your business structures and invoices its charges matters.
If you charge: Course fee: $1,000. Textbook: $100. You should not automatically assume both amounts have the same GST treatment. Look at how the supplies are made.
Can Education Businesses Claim GST Credits?
Yes, GST-free education does not mean you lose access to all GST credits. If your business makes GST-free supplies, you may generally be able to claim GST credits on eligible business purchases.
For example, you run a qualifying GST-free education business. You buy office equipment for: $2,200 including GST/ GST included: $200. If the purchase is eligible, you may be able to claim the $200 GST credit.
So: GST-free course: No GST charged. Eligible business purchase: GST credit may still be available. This is an important difference between GST-free and input-taxed activities.
What If the Business Makes Both GST-Free and Taxable Sales?
This is very common. Imagine you run a training centre. You provide qualifying GST-free courses. You also sell taxable merchandise.
For example: GST-free course fees: $50,000. Taxable merchandise: $11,000 including GST. The merchandise includes: GST: $1,000. Your accounting system needs to separate these transactions. Otherwise, your BAS may not show the correct GST amounts.
A Common Mistake
One of the biggest mistakes is: “I'm an education provider, so I don't need to charge GST.”
That is not always correct.
You need to look at:
1. What are you teaching?
2. Who is providing the course?
3. Is the course recognised or covered by the GST rules?
4. Is it a school or education course?
5. Is it private tutoring?
6. Is it professional or recreational training?
These details can change the GST treatment.
Another Common Mistake
Another mistake is treating every income stream as education. For example, you might run an education business that also sells: Books, Equipment, Online subscriptions, Consulting services, Merchandise. These may not all be GST-free. So don’t give your entire business one GST code. Look at each type of supply.
A Simple Education Business Example
Imagine you run a training business.
During the quarter, you make: Qualifying GST-free course fees: $30,000.
Taxable training services: $11,000 including GST.
The GST included in the taxable services is: $11,000 ÷ 11 = $1,000.
Your GST-free course fees have: $0 GST.
So your records need to clearly separate: GST-free sales: $30,000.
Taxable sales: $11,000.
GST collected: $1,000.
This makes BAS reporting much easier.
A Simple Checklist
Before deciding whether your education service is GST-free, ask:
1. What exactly am I teaching?
2. Is it a recognised or approved education course?
3. Does the course fall within a GST-free education category?
4. Am I providing private tutoring?
5. Is the subject ordinarily taught at a primary or secondary school?
6. Am I providing professional or recreational training?
7. Am I also selling products or materials?
8. Are my GST-free and taxable sales recorded separately?
If you are unsure, check the specific GST rules before deciding how to invoice your students.
The Bottom Line
Education and GST can be confusing. Some education services are GST-free. But not every course, lesson or training program is GST-free. Schools, universities, certain vocational courses, qualifying tutoring and certain other education services can receive GST-free treatment when the requirements are met.
Other courses may be taxable. So if you run an education business, don’t use the simple rule: “I’m teaching, so I don’t charge GST.” Look at the actual course. Check whether it qualifies. And make sure your accounting system correctly separates GST-free education from taxable sales.
Because when you are busy teaching your students, the last thing you want is to discover at BAS time that your course fees were given the wrong GST treatment.