If you’re a small business owner in Australia, learning how to do your BAS (Business Activity Statement) is one of those essential skills that can save you time, money, and a lot of stress. You know what? It’s not as scary as it sounds, and we’re here to walk you through the whole process step by step.
Understanding Your Business Activity Statement (BAS)
Let’s start with the basics. A business activity statement is essentially your regular report to the Australian Taxation Office about your business’s tax obligations. If you’re GST-registered, you’ll need to report your goods and services tax, along with other tax obligations like PAYG withholding and instalments.
The reporting period for your BAS depends on your business size and GST turnover. Most small businesses lodge quarterly, but some businesses lodge monthly or annually. The ATO assigns monthly lodgement for businesses with a higher GST turnover (over $20 million annually), while annual lodgement is generally for businesses with a turnover below $75,000 ($150,000 for non-profits).
How to Do Your BAS: The Step-by-Step Process
Here’s how to do a BAS statement from start to finish:
1. Gather Your Financial Records
Before you can complete your BAS form, you need to collect all your financial records for the reporting period. This includes:
- All tax invoices (both issued and received)
- Sales records showing GST collected
- Purchase records showing GST paid
- Payroll records if you have employees
- Bank statements and receipts for business expenses
Keeping track of these documents throughout the quarter makes this step much easier. Trust us on this one.
2. Calculate Your GST
This is where how to do a business activity statement gets a bit more technical. You’ll need to:
- Add up all GST you’ve collected on sales (GST on sales)
- Add up all GST you’ve paid on business purchases (GST credits)
- Calculate the difference to determine if you owe money or are due a GST refund
For most businesses, if you’ve collected more GST than you’ve paid, you owe the difference to the ATO. If you’ve paid more than you’ve collected, you’ll receive a refund.
3. Report PAYG Obligations
If you have employees, you’ll need to report:
- PAYG withholding amounts deducted from employee wages
- PAYG instalments if you’re required to pay tax in advance on your business income
4. Include Other Tax Obligations
Depending on your business, you might also need to report:
- Fuel tax credits (particularly relevant for tradies and transport businesses)
- Luxury car tax
- Wine equalisation tax
- Fringe benefits tax
How to Lodge a BAS: Your Options
You have several options when it comes to BAS lodgement:
Online Services
The easiest way is through the ATO’s online services. You can lodge through:
- The ATO’s Business Portal
- Your myGov account linked to the ATO
- Compatible accounting software that automatically sends your BAS data, like Xero
Online lodgement often gives you extra time to lodge and pay, which is particularly helpful for small businesses managing cash flow.
Paper Forms
You can still lodge a paper BAS form by mail, though this method takes longer to process and doesn’t offer the same due date extensions as online lodgement.
Through a BAS Agent
Many business owners choose to use a registered tax agent or BAS agent. This is particularly common for businesses with complex reporting requirements or those who simply prefer professional assistance to save them time.
GST Credits and Common Mistakes
One area where many small business owners trip up is understanding GST credits. You can claim GST credits for business purchases, but only if:
- You have a valid tax invoice
- The purchase was for business purposes
- You’re GST registered
Common mistakes include claiming GST on non-business expenses, missing the GST inclusive value calculations, or improperly claiming GST on mixed-use expenses (personal and business). These errors can trigger ATO reviews, so accuracy is important.
Activity Statement Due Dates and Payment
Each BAS has specific due dates that depend on your lodgement frequency:
- Monthly lodgers: 21 days after the end of the month
- Quarterly lodgers: 28 days after the end of the quarter (or later if lodging electronically)
- Annual lodgers: Same as your income tax return
If you can’t pay the full amount by the due date, contact the ATO to discuss a payment plan. They’re usually willing to work with businesses experiencing temporary cash flow issues.
When to Use a Tax or BAS Agent
While it’s possible to do your own BAS statement, many small businesses find value in professional help. Consider using a BAS agent if:
- Your business has complex GST situations
- You’re in a high-risk industry for ATO audits
- You’re struggling to keep up with tax obligations
- You’d rather focus on running your business
Our team at Advanced Bookkeeping and BAS provide comprehensive BAS services for businesses across Perth and Australia, handling everything from preparation to lodgement.
Sole Trader Considerations
If you’re a sole trader, your BAS process is generally simpler, but you still need to:
- Report all business income and GST
- Claim legitimate business expenses
- Ensure your Australian business number and tax file number details are current
- Lodge even if you have nothing to report (a ‘nil’ BAS)
Other Tax Obligations to Remember
Your BAS isn’t just about GST. Don’t forget to consider:
- Income tax obligations that might affect your PAYG instalments
- Payroll tax if you’re in certain states and have employees
- WorkCover and other state-based obligations
These obligations vary by state, so be sure to check local requirements. The ATO website provides comprehensive guidance on all BAS requirements and can help clarify any specific situations your business faces.
Keeping It Simple
Learning how to do your first BAS doesn’t have to be overwhelming. Start with good record-keeping throughout the quarter, understand your basic obligations, and don’t hesitate to seek professional help when needed. Many business owners find that once they establish a routine, the process becomes much more manageable.
Remember, lodging your BAS accurately and on time helps you avoid penalties and keeps your business in good standing with the ATO. It’s also a valuable exercise that gives you regular insights into your business’s financial performance.
Questions Meet Answers
How to calculate a BAS?
Calculate your BAS by adding up GST collected on sales, subtracting GST paid on business purchases, and including any PAYG withholding or instalments. The result shows whether you owe money or are due a refund.
Can I do my own BAS statement?
Yes, you can prepare and lodge your own BAS statement. However, you need good record-keeping, understanding of GST rules, and time to complete it accurately. Many business owners choose professional help for peace of mind.
Is BAS hard to do?
BAS difficulty depends on your business complexity. Simple businesses with straightforward transactions find it manageable, while businesses with multiple revenue streams, employees, or complex GST situations often benefit from professional assistance.
What is a BAS statement for dummies?
A BAS statement is your quarterly report to the ATO showing how much GST you collected, how much you paid, and other tax obligations like PAYG. Think of it as a regular tax check-in for your business.
Can a bookkeeper prepare BAS statements?
Only registered BAS agents, who are accredited by the Tax Practitioners Board (TPB), can legally prepare and lodge BAS statements for other businesses. However, bookkeepers can help organise your records and data, making the BAS preparation process much easier.
Do I need an accountant for BAS?
You don’t necessarily need an accountant, but you do need a registered BAS agent if you want someone else to prepare and lodge your BAS. Many businesses find this worthwhile for accuracy and time savings.
What documents do I need for BAS?
You need all tax invoices, sales records, purchase receipts, payroll records, bank statements, and any other documentation showing your business’s financial transactions during the reporting period.
