What Is a BAS and How Do You Lodge One?
A BAS (Business Activity Statement) is a form you submit to the ATO to report and pay the GST you have collected from customers, minus any GST you have paid to your own suppliers. For most small businesses, it is lodged quarterly. You can lodge it online through the ATO’s Business Portal, through Xero, or through your accountant. If you miss a deadline, you may be charged a Failure to Lodge penalty.
A beginner’s guide for Australian small business owners.
What is a BAS?
A Business Activity Statement is a tax reporting form issued by the Australian Taxation Office. It summarises the tax obligations a business needs to report and pay for a specific period.
Depending on how your business is set up, a BAS might include:
- GST (Goods and Services Tax): The 10 per cent tax collected on most sales, minus the GST you paid on business expenses.
- PAYG Withholding: Tax withheld from employee wages and sent to the ATO on their behalf.
- PAYG Instalments: Pre-payments toward your own income tax, so you are not hit with a large bill at tax time.
- Fringe Benefits Tax (FBT) Instalments: Only relevant if you provide fringe benefits to employees, such as a company car.
- Luxury Car Tax and Wine Equalisation Tax: Only relevant for businesses selling those specific products.
For most small businesses, the BAS is primarily about GST and, if you have employees, PAYG Withholding. The rest rarely applies.
Simple version: Your BAS is basically you telling the ATO: here is how much GST I collected from customers, here is how much GST I paid to suppliers, and here is the difference I owe you (or that you owe me).
Who needs to lodge a BAS?
Not every business lodges a BAS. The key trigger is GST registration.
You must register for GST, and therefore lodge a BAS, if:
- Your business has a GST turnover of $75,000 or more in a 12-month period.
- You provide taxi, rideshare, or limousine services (regardless of turnover).
- You want to claim fuel tax credits.
You can also voluntarily register for GST if your turnover is below $75,000 and you want to claim GST credits on your business purchases.
Important for tradies: If your business earns more than $75,000 in a year, you must register for GST. That threshold applies to your gross revenue before expenses, not your profit. A plumber charging $80,000 in jobs needs to be registered even if the work costs $60,000 to deliver.
The ATO uses specific language that can be confusing the first time you see it. Here is what each term actually means.
Key BAS Terms Explained in Plain English
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GST Collected
The 10% GST included in the invoices you have sent to customers. If you invoice a client $1,100, you have collected $100 in GST.GST Paid (Input Tax Credits)
The GST you paid when buying things for your business. If you paid $550 for materials including $50 GST, you can claim that $50 back. This is also called a GST credit or input tax credit.Net GST
GST Collected minus GST Paid. If you collected $2,000 in GST and paid $800 in GST on your expenses, your net GST is $1,200. That is what you owe the ATO.GST Refund
If you paid more GST on purchases than you collected from customers (common in a slow period or for capital-intensive purchases), the ATO owes you a refund.PAYG Withholding
Tax you have deducted from employee wages each pay run and held on the ATO’s behalf. You pay this to the ATO through the BAS rather than your employees keeping it.PAYG Instalments
Pre-payments toward your own tax bill. The ATO calculates these based on your previous year’s income. They get credited against your income tax when you lodge your annual tax return.Cash vs Accrual Basis
Cash basis means you report GST based on when money is received or paid. Accrual basis means you report it when invoices are raised, even if unpaid. Most small businesses use cash basis.
How often do you lodge a BAS?
Your lodgement frequency depends on your annual GST turnover and, in some cases, your preference.
| Annual GST turnover | Lodgement frequency | Notes |
|---|---|---|
| Under $75,000 (voluntary reg) | Annual | One BAS per year, due 28 February |
| $75,000 to $20 million | Quarterly | Four BAS per year, the most common setup for small business |
| Over $20 million | Monthly | Due 21 days after month end |
You can request to lodge monthly even if your turnover does not require it. Some business owners prefer this to keep a closer eye on their GST position. Ask your accountant whether it makes sense for your situation.
Quarterly BAS Due Dates
If you lodge quarterly, which most small businesses do, these are the four deadlines each year. Mark them in your calendar now.
| Quarter | Due date | Notes |
|---|---|---|
| Q1: July to September | 28 October | First quarter of the financial year |
| Q2: October to December | 28 February | Note: later deadline than the others |
| Q3: January to March | 28 April | Third quarter |
| Q4: April to June | 28 July | End of financial year quarter |
Tax agent extension: If your BAS is lodged by a registered tax agent, you may be entitled to a later due date. For most quarterly lodgements through a tax agent, the deadline extends to the 25th of the month after the ATO deadline. Ask your accountant whether this applies to your file.
If a due date falls on a weekend or public holiday, it moves to the next business day. If you are going to miss a deadline, contact the ATO before the due date, not after. They are more accommodating when you reach out proactively.
What GST Applies To (and What It Does Not)
Not everything you charge attracts GST, and not everything you buy allows you to claim a GST credit. Knowing the difference prevents errors on your BAS.
Taxable supplies (you charge 10% GST)
Most sales of goods and services by a GST-registered business are taxable. This includes most work done by tradies, consultants, and service businesses.
GST-free supplies (no GST charged, but you can still claim credits on expenses)
- Fresh food and groceries
- Medical and health services (in most circumstances)
- Residential rent
- International exports of goods and services
- Some educational courses and materials
- Childcare services
Input taxed supplies (no GST charged, and you cannot claim credits on related expenses)
- Financial services such as interest and bank fees
- Residential rent (you do not charge GST and cannot claim GST on associated costs)
For trades businesses: If you are a builder, electrician, plumber, or similar, virtually all of your work is taxable. You charge 10% GST on all invoices to clients and claim GST back on materials, tools, subcontractor costs, and most business expenses. Residential construction sits under general GST rules, not the margin scheme, unless you are developing and selling property.
A worked example: what a quarterly BAS looks like
Here is a straightforward example for a Brisbane electrician lodging their Q1 BAS (July to September).
| Item | Amount |
|---|---|
| Total sales (GST-inclusive) invoiced this quarter | $88,000 |
| GST collected from customers (1/11th of $88,000) | $8,000 |
| GST paid on business expenses and materials | ($3,200) |
| Net GST payable to the ATO | $4,800 |
| PAYG Withholding (tax deducted from one employee) | $2,100 |
| TOTAL AMOUNT DUE TO ATO | $6,900 |
In this example, the electrician owes the ATO $6,900 this quarter: $4,800 in net GST and $2,100 in PAYG Withholding for their employee. Both amounts go on the same BAS form and are paid together.
GST calculation shortcut: GST is always 1/11th of the GST-inclusive price. So if your invoice total is $1,100, the GST component is $100 (not 10% of $1,100). If you are working from GST-inclusive figures in Xero, it calculates this automatically.
How to Lodge Your BAS
There are three ways to lodge a BAS. All three are accepted by the ATO.
Option 1: Lodge through Xero (recommended)
If you use Xero, it pulls your GST data directly from your reconciled transactions and pre-fills your BAS. You review the figures, make sure the bank is reconciled, and submit directly to the ATO from within Xero.
This is the quickest option if your books are reconciled. Xero lodges directly to the ATO via its SBR (Standard Business Reporting) link, so lodgement is immediate.
Option 2: Lodge through your accountant or BAS agent
If your accountant or BAS agent lodges on your behalf, they have access to a later due date through the tax agent lodgement program. They also check your figures before lodging, which catches errors.
This is the right approach if your bookkeeping is not fully reconciled, if you have complex transactions, or if you simply want someone else to take responsibility for accuracy.
Option 3: Lodge through the ATO Business Portal
You can lodge directly at business.ato.gov.au using myGovID. You’ll need to manually enter the BAS info into the relevant fields based on your records. This is the least desirable option for most businesses since it takes time and is prone to entry errors, but it’s fine if you really have a simple setup.
Do not paper lodge: Paper BAS forms are still available but the ATO is phasing them out and they take longer to process. If you are currently paper lodge your BAS, switch to online lodgement. It is faster and gives you immediate confirmation.
Lodging Your BAS in Xero: Step-by-Step Guide
If you are using Xero Standard or Premium, here is the process from start to finish.
Step 1: Reconcile your bank account
Before you prepare your BAS, make sure your bank feed is fully reconciled to the end of the quarter. Every unreconciled transaction is a potential error waiting to happen in your GST figures. This is the most important step.
Step 2: Run the GST Reconciliation report
In Xero, click Accounting, then Reports, then Tax. Run the GST Reconciliation report for the quarter. This shows you a breakdown of all GST collected and paid, and flags any transactions that may need attention before you lodge.
Step 3: Prepare the Activity Statement
In Xero, click Accounting, then click Activity Statements. Xero will have a draft BAS pre-populated with your GST figures from the period. Review each line against your GST Reconciliation report. The two should match.
Step 4: Review PAYG Withholding
If you have employees, check that the PAYG Withholding amount matches your payroll records for the quarter. This will auto-populate from Xero payroll if setup correctly.
Step 5: Lodge with the ATO
Once you are satisfied with the figures, click Lodge. Xero sends the BAS directly to the ATO through its SBR connection. You will receive a confirmation number immediately. Keep this for your records.
Step 6: Pay the amount owing
Lodge and pay are two separate steps. After lodging, pay the amount owing to the ATO’s account by the due date. Payment details are on the ATO’s confirmation. You can pay via BPAY, EFT, or through the ATO portal.
6 Common BAS Mistakes and How to Avoid Them
The most common BAS errors are simple ones. They are the result of bookkeeping that is not up to date or transactions that are coded incorrectly.
- Claiming GST on things that are GST-free or input-taxed. Bank charges, rental income from residential premises, and private expenses are GST-free. Coding these expenses with GST in Xero inflates your input tax credits and creates an error the ATO will flag.
- Missing the due date. The ATO charges a Failure to Lodge penalty. For a BAS due on or after 1 July 2026, this is $364 for each 28-day period a BAS is overdue, up to a maximum of $1,820 for small businesses (the ATO penalty unit rose from $330 to $364 on 1 July 2026). Set a calendar reminder two weeks before each due date.
- Lodging before you’ve reconciled the bank. If your bank is not reconciled, your Xero GST figures may not match what actually happened. Reconcile first, then prepare the BAS.
- Confusing GST-inclusive and GST-exclusive amounts. If you invoice clients at GST-inclusive prices but enter them in Xero as GST-exclusive, you will double-count the GST. Be consistent in how you enter transaction amounts.
- Not keeping receipts for GST claims. You need a valid tax invoice to claim a GST credit on a purchase above $82.50 (including GST). If you cannot produce the invoice and the ATO asks, the credit can be disallowed.
- Claiming GST on wages. Wages are not subject to GST. If you accidentally code a wage payment with GST in Xero, you are claiming a credit you are not entitled to.
ATO data matching: The ATO receives data from banks, payment processors, and third parties. If the sales figures on your BAS are significantly lower than what your bank deposits suggest, it will be noticed. Lodge accurately and keep your records. An honest mistake corrected promptly is treated very differently from deliberate under-reporting.
What happens if you miss a BAS deadline?
Missing a BAS deadline is not catastrophic if you act quickly, but ignoring it makes it worse.
The ATO will issue a Failure to Lodge (FTL) penalty notice. For small businesses, the penalty is $364 for each 28-day period the BAS remains outstanding, up to a maximum of $1,820 (based on the penalty unit that applies from 1 July 2026).
If you also owe money and have not paid, general interest charge (GIC) accrues on the unpaid amount at 11.43 per cent per annum for the quarter beginning 1 July 2026. The GIC rate is reviewed quarterly, so check the current rate before you rely on it. Note that GIC incurred on or after 1 July 2025 is no longer tax-deductible.
What to do if you have missed a deadline
- Lodge as soon as possible, even if you cannot pay the full amount yet. Lodgement and payment are separate obligations. Lodging late reduces the penalty from accumulating further.
- If you cannot pay in full, call the ATO or ask your accountant to set up a payment arrangement. The ATO will generally agree to a payment plan for businesses that engage proactively.
- Apply for a penalty remission if you have a good compliance history and this is a one-off. The ATO does remit FTL penalties for first-time late lodgements in many cases.
- Ask your accountant to handle the ATO communication on your behalf. They are registered with the ATO and can often resolve these situations more efficiently than dealing with the ATO directly yourself.
Best practice: Set a calendar reminder 14 days before each BAS due date. That gives you two weeks to reconcile your bank, review your figures, and lodge, without any last-minute pressure.
BAS Lodgement Checklist
Run through this before you lodge each quarter.
-
Bank account reconciled to the last day of the quarter No unreconciled transactions remaining in Xero
-
All sales invoices entered and coded with correct GST treatment Taxable, GST-free, or input-taxed as appropriate
-
All expense bills entered with correct GST coding No GST claimed on wages, private expenses, or GST-free items
-
GST Reconciliation report reviewed and balanced ATO requires a 12-week logbook for the logbook Run from Accounting > Reports > Tax in Xero method, and odometer readings for cents-per-km.
-
PAYG Withholding amount matches payroll records (if you have employees)
-
BAS figures reviewed in Xero Activity Statements before lodging
-
BAS lodged by due date (or extension date if lodging through a tax agent)
-
Payment to ATO processed by the due date Via BPAY or EFT using the ATO payment reference
-
Confirmation number from ATO saved for your records
Frequently Asked Questions About the BAS
Straight answers to the questions we hear most often from business owners lodging their first BAS.
What is a BAS in Australia?
A BAS (Business Activity Statement) is a form you submit to the Australian Taxation Office to report and pay the GST you have collected from customers, less the GST you paid on business expenses. It may also include PAYG Withholding if you have employees, and PAYG Instalments toward your own income tax. Most small businesses with a GST turnover of $75,000 or more must lodge a BAS quarterly.
Do I need to lodge a BAS if I have no GST to report?
Yes. If you are registered for GST, you must lodge a BAS every period even if there were no sales or the GST amounts are nil. You cannot simply skip a period because there is nothing to pay. Lodge a nil BAS by the due date to avoid a Failure to Lodge penalty.
What is the difference between a BAS and an IAS?
A BAS (Business Activity Statement) is for GST-registered businesses and covers GST, PAYG Withholding, and sometimes PAYG Instalments. An IAS (Instalment Activity Statement) is for businesses that are not GST-registered but need to report PAYG Withholding for employees, or PAYG Instalments for their own income tax. If you have employees but are not registered for GST, you may receive an IAS rather than a BAS.
Can I claim GST on all my business expenses?
Not all expenses. You can claim a GST credit on business purchases where GST was charged and you have a valid tax invoice. You cannot claim GST on wages, private or non-business expenses, purchases from businesses not registered for GST, or expenses that are GST-free or input-taxed. A valid tax invoice is required for any purchase above $82.50 (including GST).
What happens if I make a mistake on my BAS?
You can correct most BAS errors on your next lodgement. Small errors under a specific threshold (currently $10,000 in net GST or PAYG) can be included as an adjustment on the next BAS without needing to revise the original. For larger errors, you need to lodge a revised BAS. If the error resulted in an underpayment, interest will apply on the difference. If you spot an error, tell your accountant rather than ignoring it.
Should I do my BAS myself or use an accountant?
It depends on how confident you are in your bookkeeping and how complex your transactions are. If your Xero is well-maintained and reconciled, lodging through Xero yourself is straightforward for most small businesses. If your bookkeeping is behind, you have complex transactions such as mixed GST treatment or property dealings, or you simply want the confidence of having a professional review the figures before they go to the ATO, use your accountant or a registered BAS agent.
What is a BAS agent and do I need one?
A BAS agent is a professional registered with the Tax Practitioners Board to provide BAS lodgement services. They can prepare and lodge your BAS on your behalf, access later lodgement deadlines through the tax agent program, and represent you if the ATO has questions about your lodgement. Your accountant is almost certainly also a registered tax agent, which means they can handle BAS lodgements as part of your accounting service.
I am a tradie. Do I need to charge GST on all my jobs?
If you are registered for GST (which you must be if your turnover exceeds $75,000), yes: you charge 10% GST on all standard residential and commercial building, electrical, plumbing, and trade work. The GST is added to your quoted price and collected from the client. You then claim back the GST on your own materials, tools, plant hire, and business costs through your BAS. The net amount is what you pay to the ATO each quarter.
Elle Green, CA
Elle Green is a Chartered Accountant (CAANZ) and Co-Founder of Acctivate Business Accountants, with over a decade of experience supporting small businesses across taxation and cash flow management. Holding a Bachelor of Commerce and a Xero Advisor certification, Elle is known for translating complex financial concepts into clear, practical guidance for business owners.
General information only. GST thresholds, penalty amounts, interest rates, and ATO processes are current as of the 2026–27 financial year and subject to change. Several 2026–27 Federal Budget measures affect small businesses beyond the BAS, for example, the permanent $20,000 instant asset write-off and Payday Super from 1 July 2026 and we’re happy to walk you through what applies to you. This article does not constitute tax or accounting advice. Speak with a registered tax agent or CA-qualified accountant for advice specific to your situation. Acctivate Accountants is a CA-qualified firm based in Fortitude Valley, Brisbane.
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