What is BAS? Business Activity Statement Explained

Sorting out your Business Activity Statement (BAS) is a key part of running a business in Australia. If you’re registered for Goods and Services Tax (GST), you’ll need to report certain taxes through a BAS. Lodging it correctly helps you stay compliant and avoid penalties, while keeping your business finances healthy.

In this guide, we’ll break down what a BAS is, what to include in one, and how to lodge it. There are also best practices to make the process faster and less stressful.

Table of contents
What is a BAS? What to include in a BAS statement How to lodge a BAS Best practices when lodging a BAS Wise Business: For global transactions FAQs

What is a BAS?

A BAS is a document submitted to the Australian Taxation Office (ATO) that tracks and reports on the tax a business owes across several tax types¹. All businesses registered for GST must report and pay taxes, such as:

• Goods and Services Tax (GST) collected and claimed
• PAYG withholding from employees’ wages
• PAYG instalments toward income tax
• Other taxes like the fringe benefits tax (FBT) and the luxury car tax

You don’t have to worry about finding a BAS form yourself. The ATO will start sending you a BAS automatically after you get your Australian Business Number (ABN) and register for GST. The ATO notes it will do so “when it is time to lodge.”²

What to include in a BAS statement

Curious on what is a BAS statement? A BAS statement summarises all of your business’s tax obligations for a specific period: monthly, quarterly, or annually. What you include will depend on your business activity and what needs to be reported — certain items must be disclosed in your BAS.

The most common elements are:

GST collection

You must disclose all the GST collected on sales during the reporting period, plus any paid on business expenses. There are a few categories of sales you need to include³:

• GST on taxable sales - GST is charged on any goods or services your business sells.
• GST-free sales - Sales that are exempt from GST. These include things like basic food and drinks or goods exported to clients outside Australia.
• Input-taxed sales - Sales where GST is not charged, like fundraising activities for charities.

The BAS form has fields for each of these categories, making it easier to file each one and calculate a final, accurate GST figure.

👆Read our blog for more information on how much tax a small business has to pay in Australia.

PAYG withholding

PAYG withholding relates to your payroll. It’s when you take a specific amount from one of your employees’ salaries and pay it to the ATO⁴. There are sections to report this in the BAS:

• W1 - Total salary, wages, and other payments subject to PAYG withholding
• W2 - Amounts withheld from these payments

PAYG instalments

Some businesses are required to pay portions of their expected income tax throughout the year. If your business is on the ATO’s PAYG instalment system, the amounts you prepay are reported and paid in this section of the BAS.

You can either accept the ATO-calculated instalment, which is based on your previous year’s tax, or work out your own income-based instalment for the current period. These payments are credited against your annual tax liability, reducing the amount owed when you lodge your full tax return⁵.

Other taxes

You might have to report other taxes depending on your industry and activities. These include fringe benefits tax (FBT) instalments and luxury car tax. If these aren’t relevant for your business, these sections won’t appear in your BAS.

How to lodge a BAS

There are multiple ways to lodge your BAS².

• Online through the ATO Business Portal. You can get a 2-week extension to submit your BAS when completing everything electronically.
• Through SBR-enabled accounting software, which can prefill data and lodge the BAS directly.
• Via a registered BAS or tax agent. This may give you extra time and some flexibility
• By mail using the BAS form sent by the ATO (less common nowadays).

If you’re a sole trader, you can also lodge your BAS using a myGov account linked to the ATO¹.

If you can’t lodge your BAS or pay on time for any reason, contact the ATO immediately to discuss your options⁶. You might be able to get a short extension or a separate payment plan, but only in exceptional cases.

Due date for lodging and paying a BAS

ATO states that businesses with a GST turnover below $20 million can report and pay GST quarterly if they haven’t received a direct request to report more frequently.

The due dates run regularly, every three months, from late October.

Here’s a full breakdown for the quarterly schedule⁷:

• Quarter 1 (July to September) due 28 October
• Quarter 2 (October to December) due 28 February
• Quarter 3 (January to March) due 28 April
• Quarter 4 (April to June) due 28 July

Anyone with a GST turnover on or above $20 million must report and pay GST every month. The deadline is the 21st day of each month after the taxable period ends⁷. For example:

• April monthly BAS due 21 May
• September monthly BAS due 21 October

Finally, businesses registered for GST voluntarily with a turnover below $75,000 can report and pay once a year⁷. The due date for annual returns is 31 October.

Best practices that can help when lodging a BAS

The key to lodging your BAS correctly is structure and preparation. You need systems in place that log all of your records so you have everything on hand when the time comes to file.

Here are six best practices for lodging a BAS⁸.

Keep thorough records

Keeping all your records organised and up-to-date is arguably the best thing you can do for filing BAS forms accurately. Make sure to track everything — sales, expenses, wages, stocks, logbooks for business travel, etc. Your records should align with bank statements and be retained for at least 5 years.

Manage invoices carefully

Always issue proper tax invoices with GST clearly indicated. You’re required by law to provide tax invoices if the purchase is taxable and more than $82.50, including GST. You can also claim GST credits on these.

Avoid manual errors in GST calculations

Use correct formulas, maintain separate GST columns in your cash book, and double-check that all the totals match. Pay special attention to any GST amounts you enter.

Claim GST credits correctly

You can only claim GST credits on business-related portions of mixed-use purchases for things like internet and fuel. Always calculate GST credits in the Australian dollar (AUD), too, even for foreign currency invoices. And remember to claim any credits within 4 years.

Report BAS figures accurately

When filling out the BAS report, remember to:

• Use whole dollars, not cents.
• Enter each invoice only once.
• Report transactions in the correct period (especially if you use cash accounting).
• Fill out only the applicable fields and verify all figures when filling them out manually.

Use integrated tools

Using integrated accounting software that connects to the ATO via Standard Business Reporting (SBR) makes the process a lot easier. And it reduces manual errors. For instance, integrating your accounting system with tools like Wise Business to simplify tracking income and expenses, especially if you receive or make payments in multiple currencies.

Wise Business: Manage your global transactions

Tracking cross-border payments for your BAS can be a real challenge, especially if you’re dealing with clients or suppliers in other countries on a daily basis.

Wise Business lets you track all of your incomings and outgoings with a suite of tools for managing finances. And you benefit from cheaper international transactions with low fees and no markups.

Our Business account helps by:

• Automatically syncing all the money you send and receive from overseas with your accounting software (QuickBooks, Xero, and more)
• Making all VAT and GST records transparent and easily traceable
• Reducing reconciliation errors

A Wise Business account allows users to can send, receive, and hold in multiple currencies. Experience hassle-free global transactions by transacting like a local business. Here's what you get with a Wise Business account:

• Free to register — Hold and convert between 40+ currencies. Send to 140+ countries
• Debit cards for you and your team, which you can use in 150+ countries
• Multi-user access for team members, with ways to control and manage permissions
• Pay up to 1,000 recipients at once with the Wise batch payments feature
• Integrate with your favourite cloud accounting solutions like Xero, QuickBooks, and more
• Get account details to receive in 8+ currencies for a one-time fee of 65 AUD

Sign up for the Wise Business account! 🚀

This general advice does not take into account your objectives, financial circumstances or needs and you should consider if it is appropriate for you.

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FAQs on BAS

1. What is g11 in BAS?
G11 refers to non-capital purchases you’ve made during a reporting period, such as trading stock or running expenses tied to business operations like office supplies, equipment repairs and rentals, and other leases⁹. Any capital items below $1,000 in cost not entered at G10 must also be reported.

2. What is the difference between BAS and IAS?
A Business Activity Statement (BAS) is used to disclose a range of taxes, such as GST or PAYG withholding, if your business has obligations across multiple tax areas. In contrast, an Instant Activity Statement (IAS) is issued to companies that don’t have to report GST or lodge a BAS but do have obligations for PAYG withholding (or income tax instalments)¹⁰.

3. What are BAS W1 and W2?
The ATO defines W1 as the “total salary, wages, and other payments” on which you’re required to withhold tax. This includes things like employee wages and director fees, but not super contributions. Meanwhile, W2 covers the total amount of tax you have withheld from the payments reported at W1.

4. What is the difference between BAS excluded and GST-free?
In the BAS context, GST-free sales are transactions where GST does not apply, such as basic food items or medical services¹¹. But you still need to report them on your BAS at labels like G1 or G3, depending on your reporting method. On the other hand, BAS-excluded items are transactions you do not include on your BAS at all. These include input-taxed supplies like financial services (lending money), where GST is neither charged nor claimable.

5. What is G1 in BAS?
The ATO defines G1 as “total sales,” which includes all your business’s revenue for the reporting period¹¹. This includes GST-inclusive, GST-free, and input-taxed sales. It’s a gross value regardless of whether the sales were taxable or not.

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Sources:

1. ATO Business activity statement
2. ATO - How to lodge your BAS what your BAS is, lodgment options
3. ATO - Complete your Bas - Step 1 sales G1 total sales
4. ATO - Pay as you go (PAYG) witholding W1, W2
5. ATO - How we calculate your PAYG instalment amount or rate
6. ATO - What if you can't lodge or pay on time
7. ATO - Due dates for lodging and paying your BAS gst reporting cycles
8. ATO - BAS and GST tips record keeping, invoices, avoid manual errors for GST, GST credits, completing your BAS
9. ATO - Managing GST in your business - Step 3: Purchases G11 non-capital purchases
10. ATO - Instalment activity statement list of approved forms
11. ATO - Simpler BAS GST bookkeeping guide GST-free sales, input-taxed sales, taxable sales