How BAS lodgement works, step by step

What a BAS actually reports

A BAS mainly reports two GST figures: 1A (GST you collected on sales) and 1B (GST you paid on business purchases). The difference is what you owe the ATO, or what gets refunded to you. Every other GST label on the form exists to show how those two numbers were reached — G1 for total sales, G10 and G11 for capital and non-capital purchases — and the code sitting on each transaction is what decides which label it lands on. That code has its own guide: what GST treatment means.

If you employ staff or pay yourself PAYG instalments, those figures are reported on the same form — so a BAS can cover GST alone, or GST plus PAYG, depending on how your business is set up. Amounts withheld from wages appear at W1 and W2, and an instalment toward your own income tax appears in the PAYG instalment section. Neither is GST, which is why a statement can still be due in a quarter where you sold nothing at all.

You lodge a BAS because you are registered for GST, and registration is generally required once your GST turnover reaches $75,000 — $150,000 for a not-for-profit. Under that you can register voluntarily, and some sole traders do because their customers expect an invoice showing GST. Registering is a decision with a recurring lodgement obligation attached to it, which is worth knowing before you tick the box.

When it is due, and which cycle you are on

Most small businesses lodge quarterly, with the statement due about four weeks after the quarter ends — 28 October, 28 February, 28 April and 28 July. The extra time on the December quarter reflects the holidays rather than any difference in the form. Registered tax and BAS agents often have later dates again through the lodgement program, which is one of the practical arguments for using one.

Some businesses report monthly instead, with the statement due on the 21st of the following month, and a small number report annually. The ATO sets your cycle when you register for GST. It can move you to monthly once turnover grows past the threshold for it, and you can ask to move to monthly yourself — which businesses that are consistently in a refund position often do, because it brings the refund forward by two months.

The date that matters most is not the due date but the one you put in your own calendar. A quarter reviewed in the week it closes leaves three weeks of room to chase a missing receipt or query a supplier invoice. A quarter opened on the 27th leaves none, and every problem found that day becomes an amendment rather than a correction. If you change one thing after reading this, make the review part of the quarter rather than part of the deadline.

The five steps of a lodgement, in order

Step one is to finish the period. Every account and card the business uses needs to be complete up to the last day of the quarter, because a statement built from a partial feed is wrong in a way that is invisible — the missing transactions do not announce themselves. Import from a bank feed where you can and from CSV, Excel or PDF statements where you cannot; bulk import exists for exactly the accounts a feed does not reach.

Step two is to sort what arrived. Every transaction needs a category, and the category carries the tax treatment that decides its label. Step three is to handle the exceptions by hand, because there are always a few: the one export invoice sitting in a domestic sales category, the merchant fee that did carry GST, the laptop that belongs at G10 rather than G11 because it is a capital purchase.

Step four is reconciliation. Compare the closing balance your records imply against the closing balance the bank actually shows. If the two differ, something is duplicated or missing, and finding it now costs a few minutes where finding it later costs an amendment. Step five is the review: read the labels, look hardest at any figure the system inferred rather than one you set deliberately, and only then lodge.

Cash or accruals: the choice that moves figures between quarters

GST can be accounted for on a cash basis or an accruals basis, and the choice changes which quarter a sale lands in rather than whether it is reported at all. On a cash basis, GST is counted when the money moves — you report an invoice in the quarter your client pays it. On accruals, you report it in the quarter you issued it, whether or not it has been paid yet.

Cash accounting is available to smaller businesses and is generally the kinder option when clients pay slowly, because you never remit GST on money you have not received. Accruals suits businesses that hold stock or bill well ahead of payment, and it becomes compulsory once aggregated turnover passes the threshold the ATO sets for the cash method. Most sole traders start on cash for that reason.

One consequence is worth naming before you change anything. Switching methods makes a single quarter behave oddly, because invoices around the changeover can be counted twice or missed entirely unless the transition is handled deliberately. That makes it a conversation to have with your accountant before a quarter opens rather than a setting to flip after one closes.

The four mistakes that turn into an amendment

The first is a treatment error on a recurring line. A monthly account fee coded as though GST sat inside it, or interest income coded GST-free when it is really input taxed, repeats every single month and quietly moves the same amount onto the wrong label all year. Recurring lines reward being checked once, carefully, because the error compounds while everything else looks fine.

The second is personal spending sitting in a business category. A credit claimed at 1B for something that was never a business purchase is the error most likely to be questioned, and the real fix is upstream — a separate card means the question rarely arises. The third is double counting: the same invoice arriving from a bank feed and again from a spreadsheet import, which inflates G1 and 1A together and is easy to miss because both sides move.

The fourth is the transfer read as a sale. Money moved between your own accounts is BAS excluded and belongs on no label at all, but in a raw export it looks exactly like income arriving. If your turnover figure for the quarter looks larger than the quarter felt, transfers are the first place to look and usually the answer.

Small GST errors can often be corrected on a later statement rather than by revising the original, within limits the ATO sets by turnover and amount; larger ones need a revision. Either way the correction is quick when the working is still visible, which is the argument for keeping the audit trail behind each label rather than only the totals. This is general information, not personal tax advice — check what applies to you with your accountant or the relevant tax authority.

How to lodge, and what to do if you cannot pay

You can lodge through ATO online services for business, through myGov if you are a sole trader, through SBR-enabled software, or through a registered BAS or tax agent. Whichever route you take, the statement is prepared before it is submitted, and preparing is the part that takes the time. 2Fin is not a registered tax or BAS agent and does not submit anything on your behalf — it gets the figures ready and shows their working.

Lodging and paying are two separate obligations, and separating them is the thing people get wrong under pressure. If the money is not there, lodge anyway and then arrange a payment plan with the ATO. The failure-to-lodge penalty is calculated per 28-day period overdue and applies whether or not you could have paid, so an unlodged statement adds a cost on top of the one you were already worried about.

If the cash timing is a recurring problem rather than a one-off, the underlying fix sits outside the form. GST you collect was never your money — it is a balance you are holding — and keeping it apart from the money you spend from is what makes the quarter uneventful. The same habit that makes a tax reserve work for freelancers works here, with a fixed share of every payment moved aside on the day it lands.