NeatSum
What is a BAS? A plain-English guide
A Business Activity Statement (BAS) is the form an Australian business uses to report and pay its GST to the Australian Taxation Office (ATO), along with some other regular tax obligations such as the tax withheld from employees' wages. If your business is registered for GST, you lodge one for every reporting period, even a period in which nothing happened.
This guide is for owners of Australian small and medium businesses (SMEs) who do their own books, or who want to understand the form their bookkeeper prepares. It is general information, not tax advice. The ATO's own guidance at ato.gov.au is the authority, and a registered BAS or tax agent can tell you how the rules apply to you.
Who has to lodge a BAS
Every business registered for GST lodges a BAS. You must register for GST when your GST turnover reaches $75,000 a year ($150,000 for a non-profit organisation), and you have 21 days from reaching that threshold to do it. Some businesses must register whatever their turnover, including anyone providing taxi or ride-sourcing services.
Below the threshold, registering is optional. A business that registers voluntarily lodges a BAS like any other, although it may be able to report GST once a year instead (see below).
What is on it
A BAS is a set of numbered boxes called labels. Which ones appear on yours depends on what you are registered for. The ones most small businesses meet are:
| Label | What it reports |
|---|---|
| G1 | Total sales for the period, including any GST |
| 1A | GST on sales: the GST you collected |
| 1B | GST on purchases: the GST credits you are claiming |
| W1 | Total salary, wages and other payments to employees |
| W2 | The amounts withheld from those payments (PAYG withholding) |
Most businesses with a GST turnover under $10 million use Simpler BAS, which asks for only G1, 1A and 1B for GST. Larger businesses, and those who choose full reporting, also complete labels such as G2 (export sales), G3 (other GST-free sales), G10 (capital purchases) and G11 (non-capital purchases).
Other sections appear if they apply to you: PAYG instalments if the ATO has asked you to pay instalments towards your income tax, and less commonly fringe benefits tax instalments or fuel tax credits. The statement ends with the amount you owe the ATO or the amount it owes you.
A worked example
Suppose that in a quarter a business sold $33,000 of goods, including GST, and bought $13,200 of stock and supplies for the business, also including GST. It has no employees.
GST in a price that includes GST is one eleventh of it, not 10%:
- G1: $33,000
- 1A: $33,000 / 11 = $3,000 of GST collected
- 1B: $13,200 / 11 = $1,200 of GST credits
The business owes the ATO $3,000 minus $1,200, which is $1,800. That $1,800 was never the business's money: it collected it from customers on the ATO's behalf and is passing it on. Treating GST collected as income, and spending it, is how a BAS bill becomes a cash-flow problem.
How often, and when it is due
Most small businesses lodge quarterly. You must lodge monthly if your GST turnover is $20 million or more, and you can choose to, for example to receive refunds sooner. A business that registered for GST voluntarily, with turnover below the threshold, can generally choose to report GST annually.
If you lodge yourself, the usual due dates are:
| Quarter | Due |
|---|---|
| July to September | 28 October |
| October to December | 28 February |
| January to March | 28 April |
| April to June | 28 July |
Monthly statements are generally due on the 21st of the following month. Payment is due on the same day as the lodgement. Registered BAS and tax agents can have later dates for their clients, and a due date that falls on a weekend or public holiday moves to the next business day. Check your own dates in the ATO's online services, because the ATO sets them for your business.
How to lodge
You can lodge through the ATO's Online services for business (or myGov, for sole traders), through a registered BAS or tax agent, or directly from accounting software that is set up to lodge with the ATO. However you lodge, the figures have to come from your records.
Getting the figures ready
A BAS is only as right as the books behind it. Before you lodge:
- Reconcile every bank account for the period. A missing or doubled transaction is the most common reason a BAS is wrong.
- Check the GST code on each transaction. Sales and purchases can be taxable (GST 10%), GST-free, input-taxed, or outside the BAS altogether. Wages, for instance, carry no GST.
- Keep the tax invoices for purchases where you claim a GST credit. For purchases over $82.50 including GST, you need a tax invoice to claim the credit.
- Look at the large and unusual items. A new vehicle or piece of equipment belongs in capital purchases, and something bought partly for private use can only be claimed for the business part.
- Check the payroll figures against your finalised pay runs, if you have employees.
Preparing a BAS in NeatSum
NeatSum is AI-powered Australian cloud accounting software for small and medium businesses, and it prepares the BAS from the ledger. Every invoice and bill line carries a GST code, and the BAS labels, including G1, 1A, 1B, W1 and W2, are worked out on a cash or accrual basis for the period you choose. How GST and BAS work in NeatSum covers what it calculates and what you enter yourself.
NeatSum does not lodge the BAS with the ATO. You lodge the figures it prepares through the ATO's online services, or your agent does.
If you want to understand the entries behind the form, the GST chapter of the free Learn Accounting course works through a month of them by hand. And for GST itself, from registration to tax invoices, read how GST works for Australian businesses.