BAS: What It Is and When You Need to Pay
- Jess The Small Business Book
- Jan 17
- 3 min read
Navigating the complexities of tax obligations can be daunting for small business owners in Australia.
Among the most crucial responsibilities is lodging and paying your Business Activity Statement (BAS). Whether you're new to business or just looking for a clearer understanding, this guide will explain what BAS is, why it’s important, and how to manage it effectively.
BAS: What It Is and When You Need to Pay
What Is a Business Activity Statement (BAS)?
A Business Activity Statement (BAS) is a form issued by the Australian Taxation Office (ATO) to businesses registered for Goods and Services Tax (GST). It’s used to report and pay several tax obligations, including:
Goods and Services Tax (GST)
Pay As You Go Withholding (PAYGW)
Pay As You Go Instalments (PAYGI)
Fringe Benefits Tax (FBT) instalments
Fuel Tax Credits (FTC)
Luxury Car Tax (LCT), if applicable
BAS ensures that your business meets its tax obligations regularly, maintaining compliance and avoiding penalties.
Who Needs to Lodge a BAS?
If your business is registered for GST, you must lodge a BAS. Generally, GST registration is mandatory if your business has a turnover of $75,000 or more annually ($150,000 for non-profit organisations). Voluntary registration is also an option for businesses under this threshold.
When Do You Need to Lodge and Pay BAS?
The frequency of BAS lodgement depends on your business's GST turnover:
Quarterly: Most small businesses lodge their BAS quarterly, with due dates typically falling on the 28th of the month following the end of the quarter (e.g.,
28 October for the July–September quarter).
Monthly: Businesses with a turnover of $20 million or more must lodge monthly. Smaller businesses can opt for monthly reporting if they prefer. Due dates for monthly lodgement is generally the 21 st of the month following. (e.g.,
21 September for the August month).
Annually: If you voluntarily registered for GST and your turnover is under
$75,000, you can lodge BAS annually.
It’s crucial to meet these deadlines to avoid penalties and interest charges.
How to Prepare Your BAS
Preparing your BAS can seem overwhelming, but breaking it into steps makes it manageable:
Collect Financial Data
Gather all relevant financial records, including sales, expenses, and payroll reports.
Calculate GST
Determine the GST you’ve collected from sales and the GST you’ve paid on business purchases. The difference is the GST payable or refundable.
Include PAYGW and PAYGI
If you withhold tax from employees or make instalment payments, include these amounts in your BAS.
Complete the BAS Form
Fill out the required sections of the BAS form accurately.
Submit and Pay
Lodge your BAS online via the ATO Business Portal, through your accountant/bookkeeper, or via software like Xero or MYOB. Make sure you pay before the due date.
Common BAS Mistakes to Avoid
Incorrect GST Calculations
Ensure accuracy when calculating GST amounts. Errors can lead to overpayment or underpayment. You need to calculate the exact GST that has been charged to you, and the exact GST you have on-charged.
Failing to Lodge on Time
Late lodgement attracts penalties. Mark due dates in your calendar or set reminders.
Claiming Non-Deductible Expenses
Only claim GST credits for purchases directly related to your business. For example, items paid for an owner via their drawings account would be BAS excluded.
Not Including All Income
Ensure all income, including cash sales, is reported in your BAS.
Tips for Managing BAS Efficiently
Use Accounting Software
Accounting tools like Xero, MYOB, or QuickBooks simplify GST calculations and BAS preparation.
Reconcile Accounts Regularly
Reconcile your bank statements monthly to ensure accurate records.
Seek Professional Help
If BAS feels overwhelming, consider hiring a bookkeeper or accountant to handle it for you.
Stay Organised
Keep all receipts, invoices, and financial records well-organised to streamline the process.
How The Small Business Book Can Help
At The Small Business Book, we understand that BAS can be a source of stress for
small business owners. Our team provides expert BAS preparation and lodgement services tailored to your business needs. Whether you’re a sole trader, company, or anything in between, we ensure accuracy, compliance, and peace of mind.
Our services include:
Accurate GST calculations
Lodgement via ATO-compliant systems
Timely reminders to meet deadlines
Ongoing support for tax obligations
With our help, you can focus on running your business while we handle the numbers.
Why Is BAS Important?
BAS is not just a compliance requirement - it’s a critical part of managing your cash flow and staying on top of your tax obligations. Lodging BAS on time and accurately ensures your business avoids penalties and maintains good standing with the ATO.
Wrapping Up BAS
Understanding BAS is essential for Australian business owners. By implementing efficient processes and seeking professional help when needed, you can simplify BAS preparation and focus on growing your business. If you’re looking for expert support, we are here to help with all your BAS and bookkeeping needs.
