Lodging a BAS is one of the regular compliance tasks that can catch new business owners off guard. You may know you are registered for GST or have employees, but still be unsure what the Business Activity Statement is actually for, what needs to be reported and when it is due.
Put simply, BAS lodgement is how you report and pay certain tax obligations to the ATO throughout the year. Getting it right helps you manage cash flow, keep records in order and reduce the risk of avoidable mistakes or overdue amounts.
What BAS lodgement means
BAS stands for Business Activity Statement. It is an ATO form used to report particular business tax obligations for a set reporting period, usually monthly or quarterly.
For many small businesses, the BAS is mainly about GST. You report the GST included in your sales and subtract eligible GST credits from business purchases. The result may be an amount to pay, a refund or a nil outcome.
However, a BAS can include more than GST. Depending on your registrations and business activities, it may also include:
- PAYG withholding amounts taken from employee wages and other relevant payments
- PAYG instalments, which are prepayments towards expected income tax
- Fringe benefits tax instalments
- Fuel tax credits
- Wine equalisation tax
- Luxury car tax
The ATO can combine these obligations into one activity statement. Your own BAS will only show the labels that apply to your business, so it may look different from another business owner’s form.
A BAS is not the same as your annual income tax return. Your tax return works out your overall income tax position for the financial year. Your BAS deals with particular reporting obligations during the year.
Who needs to lodge a BAS?
You will generally need to lodge a BAS if you are registered, or required to be registered, for GST. GST registration is generally required where you are carrying on an enterprise and your GST turnover meets the registration threshold. The current threshold is $75,000 for most businesses and $150,000 for non-profit bodies.
It is important to understand that turnover for GST purposes is not always the same as accounting profit or the total amount showing in your bank account. It is based on specific GST rules and may require consideration of both your current and projected turnover.
You may also receive an activity statement even if you are not registered for GST. For example, a business that employs staff may have PAYG withholding obligations, while a sole trader may have PAYG instalment obligations.
Common situations where BAS lodgement may apply include:
- a sole trader registered for GST
- a company operating a trade, service or online business
- a partnership registered for GST
- a trust carrying on an enterprise
- an employer withholding tax from wages
- a business paying PAYG instalments
- a business registered for fuel tax credits, wine equalisation tax or luxury car tax
A business that has cancelled its GST registration may still need to lodge activity statements if it remains registered for PAYG withholding, has PAYG instalments or has fringe benefits tax obligations.
If you are unsure whether you should be registered for GST, it is worth checking early. Registration can affect your invoicing, pricing, record keeping and ability to claim GST credits on eligible business purchases.
What you report on a BAS
The amounts you report depend on your circumstances. For most small businesses, the main focus is GST.
At a high level, the GST section of your BAS helps calculate the difference between:
- GST collected on taxable sales, and
- GST credits you can claim on eligible business purchases.
A purchase does not automatically give rise to a GST credit simply because it is a business expense. Broadly, the acquisition must meet the legal requirements for a creditable acquisition, including that it is connected with your business activities, the supply to you is taxable, you provide consideration and you are registered or required to be registered for GST.
Some expenses may be partly private, relate to input-taxed activities or be GST-free. In those circumstances, the GST treatment may be more complicated than simply claiming the GST shown on a receipt.
For smaller businesses using the Simpler BAS reporting method, the GST section generally requires three key figures:
- total sales
- GST on sales
- GST on purchases.
This reduces the number of labels to complete, but it does not change the need to calculate GST correctly and maintain supporting records.
If you have employees or make other payments subject to PAYG withholding, your BAS may also require you to report wages and tax withheld. The withheld amounts must be reported and paid to the ATO as required.
How often you lodge and key due dates
Your BAS reporting cycle may be monthly, quarterly or, in limited cases, annual.
Many small businesses report GST quarterly. Under the standard quarterly cycle, the usual BAS lodgement dates are:
- 28 October for the July to September quarter
- 28 February for the October to December quarter
- 28 April for the January to March quarter
- 28 July for the April to June quarter.
If the due date falls on a weekend or public holiday, the deadline generally moves to the next business day. The ATO may also allow a further period in some circumstances, and different dates can apply where a registered tax agent or BAS agent lodges under an approved lodgement program.
Monthly reporting is generally required where GST turnover meets the relevant threshold, and some businesses choose monthly reporting because it can make cash flow management easier. For monthly GST returns, the usual due date is the 21st day of the following month.
Annual GST reporting may be available to some voluntarily registered businesses with turnover below the GST registration threshold. It is not an option for every business, so it should be considered in light of your specific GST registration and reporting position.
Your BAS itself will show the reporting period and due date. This is the date to rely on, particularly if your business has changed reporting cycles, received an extension or uses an agent.
A practical BAS lodgement process
The best BAS process is not one that starts a few days before the due date. It is a regular bookkeeping routine that keeps sales, expenses, payroll and supporting documents up to date throughout the reporting period.
A simple process may look like this:
- Keep records current. Reconcile your bank accounts, payment platforms, loans, merchant facilities and petty cash regularly. Make sure transactions are allocated to the right income or expense category.
- Review sales. Check that taxable, GST-free and input-taxed sales have been treated appropriately. This is particularly important for businesses with mixed income streams.
- Review purchases. Confirm that expenses are business-related, coded correctly and supported by appropriate documentation. Separate private or mixed-use spending rather than claiming it in full.
- Check payroll reporting. If you have employees, reconcile wages and PAYG withholding figures with your payroll records before lodging.
- Prepare, review and lodge. Compare the BAS report with your financial records, investigate unusual movements and make payment arrangements if an amount is payable.
A generic example illustrates why this matters. A consultant may have issued several invoices near the end of a quarter, paid software subscriptions and purchased equipment. If their bookkeeping is incomplete, they may miss sales, claim GST on a private cost or overlook a payment already recorded in a different account. Reviewing the records before lodging helps identify these issues while they are easier to correct.
Accounting software can assist with BAS reporting, but it is only as reliable as the data entered into it. Automated bank feeds and default GST codes are useful tools, not substitutes for reviewing the underlying transactions.
What happens if you make a mistake or lodge late?
Mistakes can happen, particularly where a business is growing, changing systems or dealing with unusual transactions. A GST error is generally a mistake in working out the GST, GST credit or GST adjustment for an earlier BAS. An adjustment is different, because it relates to a transaction that was correctly reported at the time but later changed.
Depending on the type, value and timing of the error, it may be possible to correct it in a later BAS. In other cases, a revised activity statement may be appropriate. The correct approach depends on the facts, so it is sensible to seek advice before making a significant correction.
Do not ignore a BAS just because there is nothing to pay. Businesses registered or required to be registered for GST generally need to provide a GST return for each tax period, even where the net amount is zero.
Late lodgement or payment can create additional issues, including penalties and interest. If you cannot lodge or pay on time, it is better to address the position early rather than waiting for the problem to grow. In some cases, payment arrangements may be available, but they do not remove the need to lodge.
Getting BAS lodgement right
BAS lodgement is an ongoing part of running a business, not simply a quarterly form-filling exercise. Accurate bookkeeping, clear records and a regular review process make it much easier to report GST and other obligations with confidence.
For many sole traders and small business owners, the key is understanding what is included in their BAS, setting aside funds for expected liabilities and asking for help when transactions are unusual or unclear.
This article is general information only and is not personal financial or tax advice. Tax and GST obligations depend on your circumstances, so speak with a registered tax agent or accountant, such as, for advice tailored to your business.