Australian GST on Gumroad
If you live in Australia and use money to buy things, chances are you know what GST is. The question is, how do you apply it to sales made on Gumroad?
When you create an account on Gumroad, we ask you to specify what country you're in. Select Australia, and you'll not only be able to be paid out via direct deposit but GST will be applied on all of your sales to fellow Australians.
Go to your Settings menu and scroll down the page. You'll see the following prompt:
Enter the GST rate you need to charge, as well as your Tax ID (Your personal TFN). (Do NOT enter your ABN.)This rate, as indicated, will only be charged to Australian customers. Their receipts will include your Tax ID.
NOTE: If you charge Australian GST, you are still responsible to pay GST collected on Gurmroad to the ATO (Australian Taxation Office). Currently, Gumroad only allows you to add GST onto purchases and shows the approximate amount you owe and need to report.
To see the approximate weekly GST amount owed, log into your Gumroad account and go to: https://app.gumroad.com/balance. At the bottom of your weekly payout, you will see this:
All transactions in Australian dollars on Gumroad are ultimately converted to USD in your Gumroad balance. The conversion to USD uses the exchange rate at the point when each transaction occurred.
To calculate the precise GST amount owed to the ATO, you'll need to individually record the purchase amounts with GST and calculate the GST owed. The Australian dollar GST amount should roughly equal the amount shown in USD in your Gumroad account.
Also, shipping costs for physical items do not have GST amounts applied to them. Simply, add shipping cost to be inclusive in the cost of the product.
In the future, we hope to modify this for Australian-based creators and have a much easier means where Gumroad simply remits GST automatically to the ATO for you.