- You do not legally need an ABN to sell on Shopify, but you should have one
- Without an ABN, businesses paying you must withhold 47%
- Your own Shopify store is not a marketplace, so every sale counts toward $75,000
- GST registration is due within 21 days of crossing the threshold
Shopify seller accounting Australia questions start with the ABN, so here is the answer first: you do not legally need one to sell on Shopify, but without it any business paying you must withhold 47% of the payment.
In practice, a store with its own domain, paid advertising and repeat orders will meet the ATO’s indicators of carrying on a business, and at that point an ABN stops being optional in any useful sense. Once your GST turnover reaches $75,000 you have 21 days to register for GST.
The rest of this guide runs in the order the decisions actually arrive: ABN, structure, GST, your bookkeeping stack, then cross-border. If you would rather hand the whole thing over, Sleek has accountants for Australian e-commerce sellers.
Do you need an ABN for Shopify in Australia?
Not as a matter of law. business.gov.au is explicit that registering for an ABN is not compulsory, and that getting one is free. The catch is the consequence: without an ABN, other businesses must withhold 47% from payments they make to you.
The Shopify ABN question has a second half that generic guides miss. Shopify is not a marketplace, it is software for running your own store, so there is no platform standing between you and the customer to absorb any of this. You are the seller of record on every order, which is also why the GST answer further down works the way it does.
So the practical version of do you need an abn for shopify is: not to open the store, but yes before you are trading properly. If you are searching do i need an abn for shopify while the store is still a draft, the honest answer is not yet. The mechanics of getting one are covered in our guide to registering for an ABN.
Is your Shopify store a hobby or a business yet?
This is the question underneath every Shopify ABN search, and the ATO answers it with indicators rather than a number. There is no dollar threshold that turns a hobby into a business.
The ATO looks at whether you intend to be in business, whether there is a real prospect of profit, whether the scale is enough to generate one, whether the activity is repeated and continuous, and whether you run it in a business-like way. That last one is a checklist in itself:
- Keeping business records and a separate bank account
- Advertising and selling to the public
- Operating from business premises
- Holding any licences the activity requires
- Having a formal business plan
- Using a business name or an ABN
A Shopify store on a custom domain, running paid ads, with orders arriving week after week, clears most of those on its face. A one-off transaction can also count where it is intended to be repeated or is the first step in starting a business.
Sole trader or company: which should a Shopify seller pick?
Most Shopify sellers start as sole traders, and for a store that is still finding its footing that is usually the right call. The threshold to watch is not revenue, it is exposure: a sole trader is personally liable, so stock commitments, supplier contracts and product-liability risk all land on you personally.
Three things push a store toward a company: personal assets you would not want exposed, a profit level where the company tax rate starts to matter, and outside investment or partners. None of those are about how much you sell.
The full comparison sits in company or sole trader: which structure fits, and if you are staying a sole trader for now, accounting for sole traders covers what that looks like month to month.
When do you have to register for GST as a Shopify seller?
Once your GST turnover reaches $75,000, and you then have 21 days to register. Miss it and you may have to pay GST on sales made since the date you were required to register, even though you never added GST to those prices, plus penalties and interest.
GST turnover is not simply your Shopify revenue. It is your total business income, less the GST already included in sales to customers, sales to associates made without payment, sales unrelated to your enterprise, input-taxed sales, and sales outside Australia.
Two exclusions matter to sellers. Sales to overseas customers come out, which can keep an export-heavy store under the line longer than expected, and when you are projecting forward you also exclude the proceeds of selling a business asset.
The registration process itself is covered in registering for GST.
Does Shopify collect GST for you the way a marketplace does?
No. This is the single most useful thing to understand about selling on your own store, and it is where sellers who also use marketplaces get caught.
Australian GST law treats some platforms as electronic distribution platforms, and where the EDP rules apply the platform becomes liable for the GST instead of the merchant. When that happens the merchant does not return GST to the ATO on that sale, and critically does not count that sale when working out whether it has to register for GST.
But those rules only reach specific sales: low value imported goods sold to a consumer, and imported services or digital products sold to an Australian consumer. Your own Shopify store is not an EDP at all, and an Australian seller shipping Australian stock to Australian customers is not in that regime either way.
| The sale | Who remits GST | Counts toward your $75,000 |
|---|---|---|
| Your own Shopify store, Australian customer | You | Yes |
| Your own Shopify store, overseas customer | Not an Australian GST sale | No, sales outside Australia are excluded |
| Marketplace channel, low value goods imported to a consumer | The platform, as EDP operator | No |
| Marketplace channel, your stock warehoused in Australia | You, because the goods are in Australia when sold | Yes |
| Imported digital product sold to an Australian consumer through a marketplace | The platform, as EDP operator | No |
The upshot for a Shopify-only seller is simple: every sale is yours, and every sale counts. Sellers who add a marketplace channel later are the ones who need the table.
What changes if you also sell through a marketplace?
You end up running two GST treatments inside one business, which is a reconciliation problem before it is a tax problem. The marketplace channel may sit outside your turnover test while your Shopify channel sits squarely inside it.
The warehousing point is the one that catches growing stores. Move your stock into an Australian warehouse to shorten delivery times and those goods are located in Australia when they are sold, so the platform’s GST collection stops covering them and the sales come back onto your side of the line.
The ATO’s own advice is to ask the platform directly. Get answers on:
- Their policies and terms of sale
- How they treat your pricing, receipts and business systems
- How they differentiate consumer sales from business sales
- The effects of returned goods and refunds
- How they give GST information to transporters or customs brokers
Do I have to link Shopify as well on Xero?
Yes, in the sense that something has to carry the sales data across, and doing it by hand stops being viable at surprisingly low order volumes. Whether that is a direct connection or a middleware app is a tooling decision rather than an accounting one.
What matters is that the connection preserves the detail your accountant needs, not just the total that hit your bank. A feed that imports payouts as single lump sums looks tidy and destroys your ability to see gross sales, fees and refunds separately.
Our overview of Xero accounting covers the platform side. Vendor pricing, payout timing and app behaviour change often enough that this page deliberately does not quote them, so check Shopify’s and Xero’s own documentation for current specifics.
What actually has to reconcile each month?
Five things, and a payout figure alone covers none of them properly.
- Gross sales versus payouts. What the customer paid is not what landed in your account, and your income is the gross figure
- Payment processing fees. A business expense in their own right, not a reduction in sales
- Refunds and chargebacks. These reverse income and often arrive in a different period from the original sale
- Shipping income. What you charge for postage is income, separate from what you pay a carrier
- Multi-currency. Conversion happens somewhere, and the gain or loss has to land in the accounts
Get these wrong and the damage is quiet. Your revenue looks lower than it is, your GST turnover calculation runs off the wrong number, and you find out when you cross $75,000 without noticing.
Why did the ATO put you on PAYG instalments?
Because your first good year told them to expect another one. PAYG instalments are prepayments toward next year’s tax bill, and entry is automatic rather than something you opt into.
As an individual or sole trader you are entered when all three of these apply: instalment income from your latest tax return of $4,000 or more, tax payable on your latest notice of assessment of $1,000 or more, and estimated notional tax of $500 or more.
Companies work differently and enter if any one applies: instalment income of $2 million or more, notional tax of $500 or more, or being the head company of a consolidated group. For a store that had a strong second year, this is the bill nobody budgeted for.
Does the ATO already see your online sales?
Yes. The ATO runs an online selling data-matching program, and its stated targets read like a list of exactly what goes wrong for growing stores.
It looks for incorrect reporting of income in tax returns and business activity statements, failure to meet registration, reporting, payment or lodgment obligations, and failure to comply with ABN and GST registration obligations. The hobby-to-business transition is named as a specific risk area.
What the program’s overview does not publish is which platforms are covered, what data is collected, or over what periods, so treat any page that claims to know as unsourced. The practical takeaway does not depend on the detail: the income is visible, so report it.
Can you run an Australian Shopify store from an overseas company?
Yes, and plenty do, but the structure question comes before the store question. What matters is which entity actually makes the sale, because that determines where GST and income tax land.
If an Australian entity sells to Australian customers, the Australian GST rules in this article apply to it directly. If an overseas entity sells into Australia, you are into imported-goods and EDP territory, and holding stock in an Australian warehouse changes the answer again by making those sales domestic.
This page stays on the Australian side of that question deliberately. A group with a Singapore or Hong Kong parent and an Australian selling entity needs the structure mapped before the accounting is set up, not after.
What should you do in your first 90 days?
In this order, because each step depends on the one before it.
| Step | What it is | When | If you skip it |
|---|---|---|---|
| Decide hobby or business | Apply the ATO indicators honestly | Before you advertise | You misjudge every obligation downstream |
| Register an ABN | Free, via the Australian Business Register | Before you invoice or deal with other businesses | Businesses paying you withhold 47% |
| Choose your structure | Sole trader or company | Before you sign supplier contracts | Personal exposure you did not intend |
| Open a business bank account | Separate from personal money | Before the first payout | Records that cannot be untangled later |
| Connect Shopify to your accounting software | Preserving gross sales, fees and refunds | Before order volume builds | Months of manual reconstruction |
| Track turnover against $75,000 | A running figure, not a year-end one | Monthly | You cross the line without noticing |
| Register for GST if required | Within 21 days of becoming required | At the threshold | Back-dated GST, penalties and interest |
| Lodge your first BAS | Once registered | As your cycle falls due | Lodgment and payment penalties |
One honest note before the checklist gets treated as a to-do list. A genuinely small store that is still a hobby, with no ABN and turnover nowhere near $75,000, may have nothing to do beyond declaring the income in their tax return. The answer to whether you need an ABN is not automatically yes, and a page that manufactures obligations is not worth reading.
How Sleek helps Shopify sellers
Yes, Sleek works with Shopify sellers, and the honest version of what that means is bookkeeping and tax rather than store operations. Sleek does not touch your theme, your listings or your ad spend.
What Sleek does is the part that breaks quietly: connecting Shopify to your accounts so gross sales, fees, refunds and shipping land where they should, tracking turnover against the $75,000 line before you cross it, and lodging BAS and tax returns as a registered tax agent. Our bookkeeping service covers the monthly work and you can see what it costs on our fixed monthly pricing page.
If you are still deciding whether Shopify is the right platform rather than how to run the books, that is a different question and our guide to Shopify in Australia answers it. More e-commerce material sits in Sleek’s Australian knowledge base.
Ready to hand the books to someone else?
450,000
businesses worldwide.
from 4,100+ reviews.
FAQs on shopify seller accounting australia
Do I need an ABN if I'm just testing a store?
No, not while you are genuinely testing. An ABN is not compulsory, and a store with no advertising, no repeat sales and no real prospect of profit is unlikely to meet the ATO’s business indicators yet. The moment you start advertising publicly and taking recurring orders, that changes, and do i need an abn for shopify stops being a theoretical question.
Can I use my personal bank account for Shopify payouts?
You can, but it works against you. A separate business bank account is one of the ATO’s own indicators of operating in a business-like manner, and mixing personal and store money makes reconciliation and deduction claims far harder to substantiate. Open a separate account before your first payout rather than untangling it later.
Are Shopify fees deductible?
Yes, where your store is a business rather than a hobby. Platform fees, transaction and payment-processing fees, advertising costs and currency conversion charges are business expenses, and they are deductible against your store’s income. Record them as expenses rather than netting them off your sales, because your income is the gross figure the customer paid.
Do I need to lodge a BAS as a Shopify seller?
Once you are registered for GST, yes. The BAS is how you report and pay the GST you have collected and claim back the GST on your business purchases, and your lodgment cycle is set when you register. Below the threshold and unregistered, there is no BAS to lodge.
What records should I keep as a Shopify seller?
Gross sales separated from payouts, all platform and processing fees, refunds and chargebacks, shipping income and costs, and the GST position on each sale. If you sell through a marketplace as well as your own store, keep those channels separate in your records, because their GST treatment can differ. Keeping them apart from the start is far easier than reconstructing the split at year end.
