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BAS Lodgement Guide: How to Complete Your Business Activity Statement in Australia

Every GST-registered business in Australia must lodge Business Activity Statements (BAS) with the Australian Taxation Office. The BAS is how you report and pay GST, as well as other tax obligations like PAYG withholding and instalments. Understanding how to complete your BAS correctly saves time, prevents errors, and helps you avoid penalties.

This comprehensive guide walks you through the entire BAS lodgement process, from understanding what to report to submitting your statement and making payment. Whether you're lodging your first BAS or looking to improve your process, you'll find practical guidance here.

What is a Business Activity Statement?

A Business Activity Statement is a form businesses use to report and pay several tax obligations to the ATO. The most common component is GST, where you report the tax you've collected on sales and claim credits for GST paid on purchases. The difference is either paid to or refunded by the ATO.

Beyond GST, your BAS may include PAYG withholding if you have employees, PAYG instalments for income tax, and other taxes depending on your business activities. The specific labels on your BAS depend on what you're registered for and your reporting method.

BAS Due Dates You Need to Know

Missing BAS due dates results in penalties and interest charges. Quarterly BAS is generally due 28 days after the quarter ends. For businesses lodging electronically or using a tax agent, you may receive additional time.

The Australian financial quarters run July to September (Q1), October to December (Q2), January to March (Q3), and April to June (Q4). December quarter lodgements have a special extended deadline to 28 February, recognising the holiday period.

Preparing Your GST Information

Before you can complete your BAS, you need accurate figures for the reporting period. This means gathering all your sales and purchase records and calculating the relevant GST amounts. Good record-keeping throughout the quarter makes this process much easier.

For GST on sales, total all the GST you've collected from customers during the period. Your invoices should clearly show GST amounts. If you've been using accounting software, this figure is typically calculated automatically. For manual records, go through each invoice and sum the GST component. Use our Australian GST calculator to verify individual calculations.

For GST credits on purchases, gather all your tax invoices for business expenses. You can only claim credits where you have valid tax invoices, so check you have documentation for each claim. Add up the GST from all eligible business purchases.

Understanding the GST Calculation Method

You must choose an accounting method for GST: cash or accruals. This choice affects when you report GST and can impact your cash flow significantly.

Under the cash method, you report GST when you actually receive payment from customers and claim credits when you pay your suppliers. This method suits businesses with turnover under $10 million and provides better cash flow alignment since you're not paying GST before you receive the money.

Under the accruals method, you report GST when you invoice customers and claim credits when you receive invoices, regardless of when payment occurs. Larger businesses or those who prefer to match income and expenses may use this method. Once you choose a method, you generally need to stick with it.

Completing the GST Labels on Your BAS

The simplified BAS for small businesses focuses on three main GST labels. Understanding each label helps you complete your statement accurately.

Your GST payable or refund is calculated as 1A minus 1B. If 1A is larger, you owe GST to the ATO. If 1B is larger, you're entitled to a refund. The BAS form calculates this automatically once you enter your figures.

Step-by-Step Lodgement Process

Most businesses lodge BAS online through the ATO's Business Portal or through their accounting software. Here's how to complete the process:

1. Log in to Business Portal: Access the ATO Business Portal using your myGovID. Navigate to the Activity Statements section and select the period you're lodging for.
2. Review pre-filled information: The ATO may pre-fill some information based on data they've received. Check this information is accurate before proceeding.
3. Enter your GST figures: Input your total sales at G1, GST on sales at 1A, and GST on purchases at 1B. The system calculates your payable or refundable amount.
4. Complete other labels: If you have PAYG withholding for employees or other obligations, complete those sections as required.
5. Review and submit: Check all figures carefully before submitting. Once lodged, you'll receive confirmation and a document reference number.
6. Make payment: If you owe GST, make payment by the due date using BPAY, direct debit, or another accepted method.

PAYG Withholding and Instalments

Your BAS may include PAYG withholding if you have employees. This is the tax you've withheld from employee wages during the period. Report the total amount withheld and pay it to the ATO along with your GST liability.

PAYG instalments are pre-payments of your own income tax. The ATO calculates an instalment amount based on your previous tax return, though you can vary this if your income has changed. Instalments help spread your tax bill throughout the year rather than facing a large payment at tax time.

Common BAS Errors to Avoid

Errors on your BAS can trigger amendments, adjustments, and potentially audits. Avoid these common mistakes:

What If You Make a Mistake?

If you discover an error after lodging your BAS, you have options for correction. Small errors under $10,000 can often be corrected in your next BAS by adjusting the relevant amounts. Larger errors or systematic issues may require lodging a revised BAS.

The ATO takes a practical approach to genuine mistakes. If you voluntarily disclose an error and correct it promptly, penalties are typically reduced or waived. The key is to act quickly once you identify the problem and keep documentation of what went wrong.

Using Technology to Simplify BAS

Modern accounting software makes BAS preparation much easier. Programs like Xero, MYOB, and QuickBooks automatically track GST on transactions and can generate your BAS figures at the click of a button. Some even allow you to lodge directly with the ATO from within the software.

Even if you're not ready for full accounting software, maintaining organised digital records of your invoices and receipts helps. Scanning receipts, using expense tracking apps, and regularly reconciling your accounts prevents the last-minute scramble when BAS time arrives.

Conclusion

Lodging your BAS doesn't have to be stressful. With organised records, an understanding of what to report, and attention to due dates, you can complete your Business Activity Statement accurately and on time. Regular attention throughout the quarter makes the lodgement process much smoother than trying to reconstruct everything at the last minute.

If you find BAS preparation overwhelming, consider engaging a registered BAS agent. These professionals specialise in activity statement preparation and can ensure your lodgements are accurate while freeing you to focus on running your business. Whether you DIY or use professional help, understanding the fundamentals covered in this guide helps you stay on top of your GST obligations.