Updated for the 2026–27 financial year
Most core education courses are GST free under Division 38 of the GST Act. This includes pre school, primary, secondary, tertiary, vocational and a defined list of other course types. GST, which is a broad based tax of 10 percent on most goods and services, applies to courses and services that do not meet the GST free definition. The status of a course depends on the type of course and the provider, not simply on whether you run an education business.
GST And Education At A Glance
The Goods and Services Tax is a broad based tax of 10 percent applied to most goods and services sold or consumed in Australia. You can confirm the current rate through the published Australian sales tax rate, sourced from the ATO, which has stayed at 10 percent. In the education and training sector, GST treatment can be complex due to various exemptions, concessions, and eligibility requirements.
Educational services may be GST free, taxable, or input taxed depending on the nature of the service and the status of the provider. Many core educational activities are GST free under Division 38 of the A New Tax System (Goods and Services Tax) Act 1999. The key question is whether the service falls within the definition of an education course under the GST Act. If it does, it is generally GST free. If it does not, GST usually applies at 10 percent, even where the provider is a registered training organisation.
Quick Answers To Common GST Questions
Here are short answers to the questions training and education providers ask most often. Each one comes back to whether the course meets the GST free education course definition.
- Do schools charge GST on tuition? No. Pre school, primary and secondary tuition is GST free.
- Do TAFE fees have GST? Accredited vocational courses delivered by a registered training organisation are generally GST free.
- Is there GST on university tuition? No. Tertiary tuition provided by universities and higher education institutions is GST free.
- Is private tutoring subject to GST? Generally yes, unless it is linked to an accredited GST free education course. Private or individual tuition is treated as taxable.
Which Education Courses Are GST Free
Under section 38-85 of the GST Act, a supply is GST free if it is a supply of an education course, or administrative services directly related to the supply of such a course supplied by the course provider. Section 195-1 of the GST Act defines an education course as one of the following:
- Pre school course
- Primary course
- Secondary course
- Tertiary course
- Special education course
- Adult and community education course
- English language course for overseas students
- First aid or life saving course
- Professional or trade course
- Tertiary residential college course
If a course fits one of these categories and meets the conditions for that category, it is GST free. If it does not, GST must be charged on the full value of the service.
School, TAFE And University Fees
Primary, secondary and tertiary tuition is GST free. That means school fees, TAFE tuition for accredited courses, and university tuition do not attract GST.
It is important to separate two very different ideas. GST free treatment relates only to the Goods and Services Tax. It is not the same as income tax exempt status. A private school may supply GST free tuition while still being subject to its own income tax rules. The fact that tuition is GST free tells you nothing about whether the institution is income tax exempt. These are separate tests under separate parts of the law, so do not assume one follows from the other.
Vocational, Professional And Trade Courses
Vocational education and training courses delivered by registered training organisations are commonly GST free. To qualify, the provider must be registered with the Australian Skills Quality Authority or another relevant authority and deliver accredited courses. Unaccredited short courses, even where they are education related, are typically taxable unless specifically exempted.
Professional or trade courses are a separate GST free category under sections 38-85 and 195-1. A course leading to a qualification that is an essential prerequisite to enter or commence a profession or trade can be GST free. A course delivered only to maintain an existing practice generally does not meet this definition and is taxable.
First Aid, CPR, Forklift And Safety Training
First aid and life saving courses are a separately defined GST free category under the GST Act. Accredited safety and forklift training delivered by a registered training organisation can also be GST free where it meets the relevant education course definition.
By contrast, unaccredited short courses and corporate training that is not tied to a formal qualification are taxable. If a course is not formally accredited or does not fall under the definition of a GST free education course, GST must be charged on the full value of the service, even where the provider is a registered training organisation.
Adult And Community Education Courses
An adult and community education course can be GST free, but only if it passes a specific test. Section 195-1 defines this as a course of study or instruction that is likely to add to the employment related skills of the people undertaking it, delivered by a recognised provider. Sales of these courses to students by recognised providers are GST free under section 38-85.
The ATO considers an adult and community education course likely to add to employment related skills if it:
- Specifies the employment related skills participants will acquire in its course objectives
- Clearly sets out how participants will learn those skills before the course begins
- Teaches skills reasonably likely to be used at work or in a business, occupation, profession or trade, rather than for a hobby or recreation
There are important exclusions. The course must not be provided by or for an employer to their employees. It must not be provided by or for an organisation to its members, except for general community organisations with few restrictions on membership. It must not be private or individual tuition. You can read the detailed ATO position on GST free adult and community education courses.
Courses Delivered Through Agents Or Resellers
The GST free status of an adult and community education course depends on the recognised provider delivering the course directly, or through their own employees or representative. The service of delivering a course by a representative or agent of the provider is not GST free.
An independent third party who purchases the right to sell a course cannot sell that course GST free. So if your business buys the right to resell another provider’s course, you generally cannot pass it on as a GST free supply.
When GST Applies To Training
GST applies when the education service does not meet the criteria for exemption. Common taxable examples include:
- Private tutoring or coaching not linked to an accredited course
- Non accredited professional development programs
- Recreational and hobby classes
- Corporate training not aligned with a formal qualification
Even if a provider is a registered training organisation, the specific course being offered must be examined. If the course is not formally accredited or listed under the definition of a GST free education course, GST must be charged on the full value of the service.
Personal Training, Gyms, Swimming And Recreational Classes
Personal training, gym memberships, swimming lessons and similar recreational classes are generally taxable rather than GST free. They are treated as recreational because they do not add to a person’s employment related skills in the way the education course definition requires. Once a personal trainer or gym is registered for GST, they charge GST on these services.
Course Materials, Textbooks And Other Goods
While the main educational services may be GST free, institutions often supply goods and services that are subject to GST. These commonly include textbooks and stationery sold separately, uniforms, meals and canteen services, and excursions that are not directly related to the curriculum.
Materials that are genuinely part of a GST free course can stay GST free. Administrative services directly related to a GST free course are also GST free under section 38-85 where they are supplied by the provider of that course. The distinction is whether the goods or services form part of the GST free course supply or are a separate taxable sale. Providers must separate GST free supplies from taxable ones carefully, because misreporting on a Business Activity Statement can lead to penalties.
Student Services And Amenities Fees And Accommodation
A single student services and amenities fee can cover a mix of GST free and taxable items. Where that is the case, the mixed supply rules apply and the provider must work out which parts are taxable. We discuss how to approach this in the apportionment section below.
Accommodation is treated differently depending on the setting. Tertiary residential college courses are listed separately within the definition of an education course. The GST treatment of accommodation can vary, so it is sensible to check the specific arrangement rather than assume all student accommodation is treated the same way.
Training Supplied To Overseas Clients And Students
Education that is GST free for Australian students is generally GST free for overseas students. The supply of an education course is GST free under section 38-85, and the definition of an education course includes an English language course for overseas students.
An English language course for overseas students is defined in section 195-1 as a course of study or education that includes study in the English language and is supplied by an entity accredited by a State or Territory authority responsible for accreditation. To make this supply GST free, the provider must be accredited and listed on the Commonwealth Register of Institutions and Courses for Overseas Students, known as CRICOS.
An overseas student in this context is a foreign national who holds a student visa or another temporary visa that is not subject to a no study condition, and who is enrolled to study in Australia. The no study condition is condition 8207. According to the ATO interpretative decision dated 30 August 2005, a supply of English language courses to foreign nationals in Australia on a temporary visa without a no study condition is GST free under section 38-85.
Mixed Supplies And Apportionment
In many cases, a single fee covers both GST free and taxable components. For example, a fee might include GST free tuition together with access to a paid recreational facility, which is taxable.
In these situations, the provider must apportion the fee and charge GST only on the taxable component. The apportionment must be reasonable and well documented, preferably using a consistent and auditable method that you can explain if the ATO asks.
Claiming Input Tax Credits
When a provider makes GST free supplies, they are generally entitled to claim input tax credits for the GST paid on expenses directly related to those supplies. For example, a registered training organisation delivering accredited courses can usually claim GST credits on teaching materials, venue hire and equipment used to deliver the course.
Input tax credits cannot be claimed on expenses related solely to input taxed supplies, such as residential rent or financial services. This distinction matters for institutions offering a combination of GST free and taxable services.
When A Training Provider Must Register For GST
You must register for GST when your business has a GST turnover of $75,000 or more. The threshold is higher for non profit organisations at $150,000 or more, which is relevant to many community education providers. You can read the full rules on the ATO page covering registering for GST and, for not for profits, the page on GST concessions for not for profits.
A few practical points to keep in mind:
- You must have an Australian business number before you register for GST.
- GST turnover is your total business income, not your profit.
- Once you are required to register, you must do so within 21 days of your turnover exceeding the relevant threshold.
- You only need to register for GST once, even if you operate more than one business.
Example: A small training business expects to earn $90,000 in gross fees across the coming year, made up of accredited GST free courses and some taxable corporate workshops. Because the projected GST turnover is above the $75,000 threshold, the business must register for GST within 21 days of crossing it, charge GST on the taxable workshops, and report through its Business Activity Statement.
If you do not register when required, you may have to pay GST on sales made since the date you were required to register, even if you did not include GST in your prices, and you may also face penalties and interest.
Tax Invoices And Record Keeping
Once registered, providers must issue tax invoices for taxable sales, lodge regular Business Activity Statements, calculate GST payable and input tax credits, and keep accurate records.
Business records must be kept for a minimum of 5 years from the date of the transaction or the lodgement of the relevant tax return, whichever is later. Records must be in English or easily converted to English, can be stored in paper or electronic format as long as they are secure and easily accessible, and must be able to be produced for an ATO audit or review on request. You can find a helpful summary of record keeping requirements in Australia, including longer retention periods that can apply to companies, employee records and depreciating assets.
Are Training Courses Tax Deductible For The Payer
It is worth separating two questions. Whether GST applies to a course is a Goods and Services Tax question. Whether the cost of a course is tax deductible to the person or business paying for it is an income tax question, decided under different rules.
Work related training may be deductible to the individual or business that pays for it, depending on its connection to current income earning activities, regardless of whether the course was GST free or taxable. The two outcomes are independent, so a GST free course can still be deductible, and a taxable course is not deductible simply because GST was charged.
Frequently Asked Questions
Do schools pay GST? School tuition for primary and secondary education is GST free, so schools do not charge GST on those tuition fees.
Do school fees have GST? No. Pre school, primary and secondary tuition fees are GST free.
Do TAFE fees have GST? Accredited vocational courses delivered by a registered training organisation are generally GST free.
Is there GST on university fees? Tertiary tuition provided by universities and higher education institutions is GST free.
Is tutoring GST free? Private or individual tuition is generally taxable unless it is part of an accredited GST free education course.
Are swimming lessons GST free? Swimming lessons and similar recreational classes are generally taxable rather than GST free, because they do not add to employment related skills.
Do I charge GST for overseas clients? An English language course for overseas students can be GST free where the provider is accredited and CRICOS listed and the student holds a temporary visa without a no study condition. Education that is GST free for Australian students is generally GST free for overseas students.
Do I charge GST on materials? Materials genuinely part of a GST free course can stay GST free, while textbooks, stationery and similar goods sold separately are generally taxable.
Get GST Right For Your Training Business
The GST treatment of education and training in Australia is rarely simple. With separate course categories, mixed supplies, agent and reseller rules, and apportionment to manage, it is easy to charge GST where you should not, or miss it where you should. Getting it wrong can lead to misreporting on your Business Activity Statement, along with penalties and interest.
The good news is that once you understand which category your courses fall into and how the rules apply to your specific offering, your reporting becomes far more predictable. If you would like to confirm the correct GST treatment for your courses and feel confident in your BAS reporting, the team at Tax Window can review your situation and give you tailored advice for your training business.
About The Author: Artur Osadchiy
Artur is a Certified Practising Accountant with over 30 years’ experience working as a trusted advisor to 600+ clients across Australia. Based in Melbourne, he started Tax Window with his wife Marina in 2009 and leads the firm’s tax and accounting team. In his free time, Artur enjoys watching the AFL (go Kangas!) and spending time with family.
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