Are You Applying GST Correctly for Vouchers?

If your business is registered (or required to be registered) for GST, it’s important to know when to account for GST on the vouchers you sell. The rules depend on the type of voucher and how it’s redeemed — and many small businesses are unintentionally reporting it incorrectly.

The Two Main Types of Vouchers

Face Value Vouchers

• These can be redeemed for a reasonable choice of goods or services (for example, a $100 gift card that can be used across your store).
• You don’t account for GST at the time of sale. Instead, GST applies when the voucher is redeemed for taxable goods or services.
• If a voucher expires or is not redeemed, you’ll need to make an increasing adjustment on your Business Activity Statement (BAS) when you recognise the unredeemed value as income in your accounts.

Non–Face Value Vouchers

• These can only be redeemed for specific goods or services (for example, a “massage voucher” or “car wash voucher”).
• You must account for GST when you sell the voucher, but only if the underlying goods or services are taxable.
• If the voucher is redeemed for GST-free or input-taxed goods or services, GST doesn’t apply.

Common Mistakes to Avoid

Many businesses make errors by:

Applying GST at the wrong time (e.g., at sale instead of redemption)

• Failing to make BAS adjustments for expired vouchers
• Not separating face-value and non-face-value vouchers in their bookkeeping
• Reporting GST on vouchers redeemed for GST-free sales (like certain health or education services)

If you’ve realised you may have accounted for GST incorrectly, you can correct the error on a later BAS or make a voluntary disclosure to the ATO to minimise penalties.

How TaxAssist Accountants Can Help

The GST rules around vouchers can be confusing — and mistakes can affect both your BAS and end-of-year reporting. Our expert accountants can help you:

• Review your voucher types and GST treatment
• Identify where adjustments are needed
• Ensure your Xero or accounting system is set up to track vouchers correctly
• Prepare and lodge accurate BAS statements
• Advise on correcting past errors through the proper ATO process

As your registered tax and BAS agent, we’ll make sure your GST is applied correctly — and help you avoid unnecessary stress at BAS time.

Contact your local TaxAssist Accountant today by clicking on the link here to review your voucher setup and ensure your business stays compliant.

Last updated: 29th September 2025