Charity and not-for-profit expenses in Australia: the complete GST and FBT guide

An Australian charity is usually exempt from income tax, so the expense questions that matter are GST and FBT. On GST, a registered charity claims credits much like a business, with two big carve-outs: purchases for fundraising events it has elected to treat as input taxed, and purchases for residential accommodation. On the income side, donations and most grants are not payments for anything and attract no GST, while raffles, cheap non-commercial sales and donated second-hand goods are GST-free. On FBT, public benevolent institutions get an exemption and many other charities a rebate. This guide walks through the whole ledger with a verdict before the detail. Every figure is sourced to the ATO in the Sources section, retrieved 10 October 2026.

What this guide covers: GST registration at $150,000, claiming GST credits, donations and grants, fundraising events, raffles and bingo, non-commercial activities, donated goods, FBT exemptions and rebates, volunteers, and the records that tie it together.

The charity’s ledger at a glance

The rest of this guide walks through each row, and every section opens with its verdict.

Where ExpenseFlow fits

A charity’s purchase ledger is program supplies, venue and catering bills, printing for appeals, staff and volunteer reimbursements, and grant-funded project costs that need tracking against acquittals. ExpenseFlow captures each document (email forward, upload or phone), reads the line items and GST, codes each line with a written reason, and routes anything uncertain to a person before it posts. Its nonprofit check comes from the rules on this page: a line or account that reads as grant-funded, fundraising, appeal, donor-funded, bursary, outreach or beneficiary support is flagged, because a charity claims GST credits only to the extent a purchase is for a creditable purpose and that split is an accountant’s judgement, not a per-invoice one. A document over $82.50 with no ABN is flagged too. After approval the bill syncs to Xero with the source document attached, or to QuickBooks Online as a coded bill.

What it does not do: it never decides whether a fundraising event is input taxed, never applies the non-commercial threshold tests and never works out FBT caps.

The ExpenseFlow for charities and nonprofits page covers these checks across all five countries.

GST registration

A not-for-profit must register for GST if it is carrying on an enterprise and its GST turnover is $150,000 or more ^[1] . The test is met when current turnover (this month and the previous 11) is $150,000 or more and projected turnover is not below it, or when projected turnover (this month and the next 11) is $150,000 or more ^[1] . Registration is due within 21 days, and registering late can mean paying GST on past supplies plus penalties ^[1] . Gifts and donations are not included in GST turnover ^[2] . A smaller charity can choose to register voluntarily, which is usually worth it when it buys a lot of taxable goods and services.

Claiming GST credits

A registered organisation can claim a credit for GST in the price of goods and services bought in carrying on its activities, if the purchase is for the organisation, doesn’t relate to making input-taxed supplies, includes GST, and is backed by a tax invoice for purchases over $82.50 ^[3] . Credits can be claimed within four years ^[3] . There is no credit on wages, GST-free or input-taxed purchases such as bank fees and interest, purchases from unregistered suppliers, or purchases used to make input-taxed supplies like residential accommodation ^[3] . Check suppliers on ABN Lookup before claiming ^[3] .

Donations and grants

A gift or donation to a not-for-profit is not payment for a supply, so you don’t pay GST on it or count it in GST turnover ^[2] . It is a gift when the donor made it voluntarily and received no material benefit in return ^[2] . For grants, there is no GST if the funding is not for a supply; meeting eligibility criteria such as working in an area of impact, operating in a location, holding DGR status or acquittal reporting does not make it one ^[4] . If you provide something of value in return for the grant, it can be a supply and GST may apply ^[4] . Read each funding agreement for what you must deliver, not just what you must report.

Fundraising events, raffles and bingo

Endorsed charities, certain gift-deductible entities and government schools make GST-free sales when they sell raffle tickets or bingo admissions without contravening state or territory law ^[5] . They can claim credits for purchases related to running the game, but not for non-monetary prizes that were donated ^[5] .

For events, an eligible entity can choose to treat all supplies made in connection with an eligible fundraising event as input taxed, if it makes the choice before any transactions take place and records it, for example in its minutes ^[6] . Input-taxed supplies carry no GST in the price, attract no credits on related purchases, and are left out of GST turnover ^[6] . You can hold up to 15 events of each category a financial year (fetes, balls, gala shows, dinners and performances; sales of goods at $20 or less without alcohol or tobacco; events the ATO has approved), and holding more than 15 in a category disqualifies all of them ^[6] . Whether to elect is a sum: a gala dinner with high venue costs and modest ticket sales may be better left taxable, so that the venue GST is claimed.

Non-commercial activities and donated goods

A supply by an endorsed charity, certain gift-deductible entity or government school is GST-free when its total consideration meets the nominal consideration threshold tests ^[7] . For anything other than accommodation, that means less than 50% of the GST-inclusive market value, or less than 75% of what you paid for the thing ^[7] . For accommodation, less than 75% of either the GST-inclusive market value or the cost of providing it ^[7] . Sales of donated second-hand goods are GST-free too, unless you change the original character of the goods; cleaning or repairing them doesn’t ^[8] . In both cases you can claim credits on related purchases and include the sales in GST turnover ^{[7] [8]} .

FBT exemptions, rebates and volunteers

Public benevolent institutions and health promotion charities registered with the ACNC and endorsed by the ATO are exempt from FBT up to $30,000 of grossed-up value per employee; public and not-for-profit hospitals and public ambulance services up to $17,000 ^[9] . Above the cap you pay FBT on the excess and report benefits for all employees ^[9] . Rebatable employers, including charitable institutions that are not PBIs and many community, sporting and arts not-for-profits, get a rebate of 47% of the gross FBT payable on the first $30,000 per employee ^[10] . Benefits for volunteers and independent contractors are not subject to FBT, and reimbursing a volunteer’s out-of-pocket expenses doesn’t make them an employee ^[11] .

Staff, BAS and records

The super guarantee rate is 12%, and Payday Super applies from 1 July 2026 ^[12] . Keep the minute recording each input-taxed event election ^[6] , the funding agreement behind each grant ^[4] , and the market value evidence behind each non-commercial price ^[7] . The GST and BAS guide, BAS lodgment guide and record-keeping guide cover the rest.

Common mistakes

• Counting donations towards the $150,000 GST turnover ^[2] .
• Charging GST on a grant that only comes with eligibility criteria and acquittal reports ^[4] .
• Claiming credits on costs of an event elected as input taxed ^[6] .
• Electing an event input taxed after tickets are sold, or running a sixteenth event in a category ^[6] .
• Claiming a credit for donated raffle prizes ^[5] .
• Treating volunteer reimbursements as fringe benefits ^[11] .