Business Activity Statement
Understanding the Business Activity Statement (BAS) is essential for Australian businesses that are registered for Goods and Services Tax (GST) and other tax obligations. This comprehensive guide explains what BAS is, the types of taxes it includes, and how to prepare, lodge, and submit it correctly. It also covers practical aspects of BAS bookkeeping, submission methods, and due dates for monthly, quarterly, or annual lodgment. Whether you’re handling your BAS independently or with the help of an agent, staying informed and organised will help you meet your tax responsibilities accurately and on time.
What is BAS (Business Activity Statement)?
A Business Activity Statement, commonly known as BAS, is a form submitted to the Australian Taxation Office (ATO) by businesses to report and pay several tax obligations. BAS is essential for businesses registered for GST and helps the ATO keep track of a business’s tax responsibilities. BAS helps businesses manage their cash flow by keeping their tax obligations up to date and supports compliance with Australian tax laws.
The Business Activity Statement (BAS) can include reporting and payment for several types of taxes and obligations, depending on your business registration with the ATO. Here is a list of the main taxes and items that may appear on a BAS:
- Goods and Services Tax (GST)
- Pay As You Go (PAYG) Withholding
- Pay As You Go (PAYG) Instalments
- Fringe Benefits Tax (FBT) Instalments
- Luxury Car Tax (LCT)
- Wine Equalisation Tax (WET)
- Fuel Tax Credits
Not every business reports all of these. What you include in your BAS depends on your business activities and registrations with the ATO.
How to prepare a BAS statement?
Preparing a Business Activity Statement (BAS) involves collecting and organising all the financial information your business needs to report to the Australian Taxation Office (ATO). Before you start, ensure your records are up to date and accurate. You will need to gather details of your income and expenses, including any GST you have collected from sales and GST you have paid on purchases. This includes tax invoices, receipts, payroll summaries if you employ staff, and records of any fuel tax credits or other applicable adjustments.
Once your records are ready, calculate your GST liabilities and credits. Subtract the GST you paid on business purchases from the GST you collected on sales to determine whether you owe money to the ATO or are entitled to a refund. If you are reporting Pay As You Go (PAYG) withholding for employee salaries or PAYG installments for your own tax, these amounts also need to be included in the BAS.
After completing all relevant sections, double-check your calculations for accuracy. Keeping your records organised throughout the reporting period makes preparing your BAS more efficient and reduces the risk of errors or late lodgment.
How to lodge a BAS?
Lodging a Business Activity Statement (BAS) in Australia is an important responsibility for businesses that are registered for Goods and Services Tax (GST) and other tax obligations. The BAS is used to report and pay taxes such as GST, Pay As You Go (PAYG) withholding, PAYG installments, and more. Before lodging, it is essential to ensure your business records are accurate and up to date, including sales, purchases, wages paid to employees, and any GST collected or paid.
You can lodge your BAS through several methods. These include Online Services for Business, Standard Business Reporting (SBR) enabled software, the ATO Online Services accessed through myGov if you’re a sole trader, or with the help of a registered tax or BAS agent. Many businesses choose to lodge online as it is fast, convenient, and provides immediate confirmation of submission.
Most businesses lodge their BAS on a quarterly basis, but how often you need to lodge depends on your business size and tax obligations. Lodging quarterly is the most common option, as it helps businesses manage their cash flow by spreading tax payments throughout the year. This approach can help avoid a large lump-sum payment at the end of the financial year, which might put strain on business finances.
When completing your BAS, fill in only the sections that apply to your business, such as GST collected on sales, GST paid on purchases, and PAYG amounts. Once all information is reviewed and confirmed, you can submit the BAS and make any required payment using BPAY, direct debit, or other accepted payment methods. It’s important to lodge on time to avoid penalties and interest charges. You should also keep a copy of your lodged BAS and supporting documents for at least five years in case the ATO needs to review them later.
How to submit BAS?
Submitting a Business Activity Statement (BAS) is an important responsibility for Australian businesses registered for Goods and Services Tax (GST). There are several ways to submit your BAS, and choosing the right method can help ensure accuracy and avoid delays. Most businesses use the ATO’s Online Services for Business, a secure platform designed for fast and efficient lodging. If you’re a sole trader, you can submit your BAS through your myGov account by linking it to the ATO. Another popular method is using Standard Business Reporting (SBR)-enabled software, which allows businesses to prepare and lodge their BAS directly from their accounting software, offering seamless integration and reduced manual effort.
While it is still possible to submit a paper BAS, this method is considered outdated and is generally not recommended. The Australian Taxation Office advises against paper lodgment because it involves much longer processing times, often taking up to 60 days. For this reason, businesses are encouraged to lodge electronically for faster, more reliable processing.
Alternatively, you may engage a registered tax or BAS agent to lodge your BAS on your behalf. This option is especially helpful if you’re unsure about any part of the process or need support with compliance. After you submit, keep a copy of your BAS and all supporting records. You can make payments using BPAY, credit card, or direct debit, and it’s important to meet the payment deadlines to avoid penalties or interest charges.
BAS Bookkeeping
BAS bookkeeping refers to the process of maintaining accurate financial records specifically for the purpose of completing and lodging your Business Activity Statement (BAS) with the Australian Taxation Office (ATO). Good bookkeeping practices ensure that all income, expenses, GST, PAYG withholding, and other business taxes are properly recorded throughout the reporting period. This makes it much easier to prepare and lodge your BAS accurately and on time.
Effective BAS bookkeeping involves tracking all business transactions, issuing and storing tax invoices, recording GST collected on sales and GST paid on purchases, and keeping up-to-date payroll records if you employ staff. It’s important to reconcile your bank statements regularly and ensure your accounting software or ledger reflects accurate figures. Categorising your income and expenses correctly is also essential to avoid reporting errors.
Using accounting software like Xero, MYOB, or QuickBooks can simplify the process and reduce manual errors. These platforms can generate BAS reports based on the data you’ve entered, which can then be used for lodgment. If you’re unsure about the process or your records are complex, working with a bookkeeper or BAS agent can help ensure compliance with ATO requirements and avoid penalties. Regular and accurate bookkeeping not only supports BAS lodgment but also helps you keep a clear picture of your business’s financial health.
BAS Statement Due Dates
BAS statement due dates depend on how often your business is required to lodge and pay the Business Activity Statement with the Australian Taxation Office (ATO). The frequency of lodging such as monthly, quarterly or annually depends on your business size, structure and the types of taxes you need to report.
For most small to medium-sized businesses that lodge quarterly, the due dates are as follows:
Quarter 1, covering July to September, is due by 28 October
Quarter 2, covering October to December, is due by 28 February
Quarter 3, covering January to March, is due by 28 April
Quarter 4, covering April to June, is due by 28 July
If you lodge monthly, the BAS is due by the 21st day of the following month. For example, the BAS for January must be lodged by 21 February.
If you lodge annually, usually because your GST turnover is under the threshold and you have chosen the annual reporting cycle, the due date aligns with your income tax return. This is generally 31 October if you lodge it yourself or a later date if using a registered tax agent.
Registered tax or BAS agents often receive extended lodgment deadlines, but it is important to engage with them early to qualify for those extensions. Lodging and paying your BAS on time helps you avoid penalties and interest charges, so it is a good idea to set reminders or use accounting software that tracks these key dates for you.