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For Australian businesses, staying compliant with tax obligations is a crucial part of financial management. One of the key reporting requirements for businesses registered for Goods and Services Tax (GST) is the Business Activity Statement (BAS).
What is BAS, how does it work, and what does it mean for your business? This guide will explain who needs to lodge BAS, what it includes, when it is due, and how businesses can manage BAS reporting efficiently. Plus, we’ll explore how Budgetly can help track expenses and simplify BAS preparation.
- What is BAS?
- Who needs to lodge a BAS?
- When is a BAS due?
- What information is included in a BAS?
- Why is BAS important for businesses?
- Common mistakes businesses make when lodging BAS
- How to prepare and lodge your BAS correctly
- How Budgetly helps businesses manage BAS-related expenses efficiently
- Looking ahead: Staying on top of BAS reporting
What is BAS?
BAS (Business Activity Statement) is a form submitted to the Australian Taxation Office (ATO) that reports a business’s tax obligations, including GST, PAYG withholding, and other business taxes.
Businesses registered for GST must lodge a BAS regularly, declaring how much GST they have collected and paid. The ATO then calculates whether the business owes GST or is eligible for a refund.
BAS is essential for:
- Reporting and paying GST
- Declaring PAYG withholding for employee wages
- Paying other business taxes (if applicable)
It is a key compliance requirement for all GST-registered businesses in Australia.
Who needs to lodge a BAS?
A business must lodge a BAS if:
- It is registered for GST.
- It has a turnover of $75,000 or more per year ($150,000 for non-profits).
- It operates as a company, sole trader, or trust that meets GST thresholds.
If a business is not registered for GST, it does not need to submit BAS, but it must still meet other tax reporting obligations.
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When is a BAS due?
BAS lodgement deadlines depend on the business’s reporting cycle. The ATO assigns one of three reporting frequencies based on business turnover:
| BAS Reporting Frequency | Who Needs to Lodge? | Due Dates |
|---|---|---|
| Quarterly (most businesses) | Businesses with turnover under $20 million | 28 Oct, 28 Feb, 28 Apr, 28 Jul |
| Monthly | Businesses with turnover over $20 million | 21st of each month |
| Annually | Businesses that voluntarily registered for GST | 31 Oct (same as tax return) |
Late BAS lodgement can lead to penalties and interest charges, so businesses must ensure on-time submissions.
What information is included in a BAS?
A BAS form includes multiple tax obligations, but the key components are:
1. Goods and Services Tax (GST)
- GST collected from sales (output tax).
- GST paid on business expenses (input tax credits).
- The net amount owed to the ATO or refundable.
2. Pay As You Go (PAYG) withholding
- Tax withheld from employee wages before paying salaries.
3. Pay As You Go (PAYG) instalments
- Estimated income tax payments for businesses required to pay in advance.
4. Other taxes (if applicable)
- Luxury car tax, fuel tax credits, wine equalisation tax, and other levies.
Businesses must keep accurate records to ensure all BAS information is correctly reported.
Why is BAS important for businesses?
Submitting BAS correctly and on time is essential because:
- It ensures GST compliance – Businesses report how much GST they owe or should be refunded.
- It avoids penalties – Late submissions can lead to fines from the ATO.
- It helps manage cash flow – Knowing GST obligations in advance prevents unexpected tax bills.
- It provides financial transparency – BAS reporting reflects the financial health of a business.
By keeping up with BAS obligations, businesses avoid financial and tax-related issues.
Common mistakes businesses make when lodging BAS
Many businesses make errors when preparing and submitting BAS. Here are the most common mistakes to avoid:
1. Incorrectly reporting GST
- Forgetting to include GST on taxable sales.
- Claiming GST credits on non-GST expenses (e.g., GST-free items like basic food).
2. Missing PAYG obligations
- Not reporting or under-reporting tax withheld from employee wages.
3. Failing to keep proper records
- Without valid tax invoices and receipts, businesses cannot claim GST credits.
4. Late lodgment
- Submitting BAS after the deadline can result in ATO penalties.
5. Overpaying or underpaying GST
- Errors in calculation can lead to paying more tax than necessary or owing additional GST later.
Avoiding these mistakes ensures accurate and efficient BAS lodgement.
How to prepare and lodge your BAS correctly
Businesses can lodge BAS electronically or manually through the following methods:
1. Online via the ATO Business Portal
- The most convenient way for businesses to lodge BAS directly with the ATO.
2. Using accounting software
- Platforms like Xero, MYOB, and QuickBooks allow businesses to automatically generate and submit BAS.
3. Through a registered tax or BAS agent
- Tax professionals can prepare and lodge BAS on behalf of a business.
4. By mail
- Paper BAS forms can be sent via post, but this method takes longer.
Businesses should choose the most efficient method to avoid delays and ensure accurate lodgement.
How Budgetly helps businesses manage BAS-related expenses efficiently
Preparing and lodging BAS requires accurate financial tracking. Budgetly provides an efficient way to manage BAS-related expenses, ensuring businesses keep accurate records for tax reporting.
1. Automated GST tracking
- Records GST on every transaction, making it easier to track input tax credits.
2. Digital receipt storage
- Upload and organise receipts for better GST claim management.
3. Real-time expense monitoring
- Keep track of all business purchases and expenses in one place.
4. Categorisation of taxable and non-taxable expenses
- Ensures accurate GST reporting for BAS submissions.
5. Integration with accounting software
- Sync with Xero, MYOB, and QuickBooks for seamless financial reporting.
With Budgetly, businesses can stay organised, reduce errors, and improve tax compliance.
Looking ahead: Staying on top of BAS reporting
Understanding what BAS is and how it works is essential for ensuring compliance and maintaining financial stability. By keeping accurate records, reporting on time, and using smart business expense management tools, businesses can avoid tax issues and penalties.
For businesses looking to improve BAS preparation, Budgetly offers a hassle-free way to track expenses, manage GST, and keep financial records organised.
Simplify your business tax obligations today with Budgetly!
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