Understanding BAS: A Plain-English Guide for Small Business Owners

If you're registered for GST, you need to lodge a Business Activity Statement (BAS). For many small business owners, BAS time is a source of stress — not because it's genuinely complicated, but because nobody ever explained it clearly.

Here's what you actually need to know.

A BAS is a form you submit to the ATO to report and pay several tax obligations at once. Depending on your business, it may include:

• GST — the goods and services tax you've collected from customers, minus the GST credits you're entitled to claim on business purchases
• PAYG withholding — the tax you've withheld from employee wages
• PAYG instalments — prepayments toward your own income tax
• Fuel tax credits — if your business uses fuel in eligible ways

Most small businesses are primarily dealing with GST when they think about BAS.

Your lodgement frequency depends on your annual GST turnover:

• Monthly — if your turnover is $20 million or more
• Quarterly — most small businesses fall here (turnover under $20 million)
• Annually — if you voluntarily registered for GST and your turnover is under $75,000

Quarterly BAS due dates are generally:

• Q1 (July–September): 28 October
• Q2 (October–December): 28 February
• Q3 (January–March): 28 April
• Q4 (April–June): 28 July

If you lodge through a registered tax agent, you may be entitled to extended due dates.

When you sell goods or services, you collect 10% GST from your customers. When you buy things for your business, you pay GST to your suppliers. The difference is what you owe the ATO — or what the ATO owes you.

Example:

• GST collected from customers: $3,000
• GST paid on business purchases: $800
• Net GST payable to ATO: $2,200

This is why keeping your records up to date throughout the quarter matters so much. If you're scrambling to find invoices at BAS time, you're almost certainly missing input tax credits you're entitled to.

Not everything has GST. Fresh food, residential rent, and some financial services are GST-free. Claiming GST credits on these purchases is an error the ATO will pick up.

If you use a business account for personal purchases, you need to separate them before lodging. Claiming GST on personal expenses is not allowed.

Late lodgement attracts penalties and interest. If you can't lodge on time, contact the ATO or your tax agent before the due date — not after.

The ATO requires you to keep records for five years. This includes tax invoices for any purchase over $82.50 (including GST). Without a valid tax invoice, you can't claim the GST credit.

When you register for GST, you choose an accounting method:

• Cash basis — you report GST when money actually changes hands. Simpler for most small businesses.
• Accruals basis — you report GST when invoices are issued or received, regardless of payment. Required if your turnover exceeds $10 million.

Most small businesses use the cash basis. If you're unsure which method you're on, check your BAS settings in your accounting software or ask your tax agent.

The best way to make BAS painless is to stay on top of your bookkeeping throughout the quarter. That means:

• Reconciling your bank accounts regularly
• Keeping all tax invoices (digital copies are fine)
• Categorising transactions correctly in your accounting software
• Separating personal and business expenses

If bookkeeping isn't your strength — or you simply don't have time — outsourcing it to a professional is often more cost-effective than you'd expect.

Golden Mane Advisory handles BAS preparation and lodgement for businesses across Perth and Australia. If you'd like to hand this off to someone who knows what they're doing, get in touch.