Published: May 2025
The Business Activity Statement (BAS) is a critical tax reporting tool for Australian businesses, ensuring compliance with the Australian Taxation Office (ATO). Whether you’re a sole trader, small business, or large enterprise, understanding the key elements of a BAS is essential to avoid penalties and manage tax obligations effectively. This guide explains the main parts of a BAS, their purpose, and practical tips for compliance.
A Business Activity Statement (BAS) is a form submitted to the ATO, typically monthly, quarterly, or annually, to report and pay tax obligations such as goods and services tax (GST), pay as you go (PAYG) withholding, PAYG instalments, and other taxes. It reflects your business’s financial activity over a period. In 2023-24, over 2.5 million businesses lodged BAS, with small businesses (turnover under $10 million) making up 80% of submissions (ATO, 2024). Errors in BAS lodgement can lead to penalties of up to $313 per day for late submissions (ATO, 2025). Let’s explore the key elements in detail.
Purpose: GST is a 10% value-added tax on most goods and services sold or consumed in Australia. Introduced in 2000 under the A New Tax System (Goods and Services Tax) Act 1999, it funds public services like healthcare, education, and infrastructure. Businesses are taxed to ensure a broad-based revenue stream for the government, while allowing credits for business-related purchases to avoid double taxation.
Who It Applies To: Businesses with an annual turnover of $75,000 or more (or $150,000 for non-profits) must register for GST. Voluntary registration is common for smaller businesses to claim credits.
Tip: Use accounting software like Xero or MYOB to track GST. The ATO’s 2024 data shows digital tools reduce GST errors by 30%. Also understand certain types of GST, such as Simpler BAS, which is the default reporting method for small businesses with a GST turnover of less than $10 million.
Use our free GST calculator here
Purpose: PAYG withholding ensures income tax is collected from employees, contractors, or other payees throughout the year, smoothing tax collection for the ATO and reducing end-of-year tax burdens for individuals.
Who It Applies To: Businesses with employees, contractors without an ABN, or those making payments subject to withholding (e.g., dividends).
Insight: Single Touch Payroll (STP), mandatory since 2019, ensures real-time reporting via payroll software like KeyPay, reducing errors by 35% (ATO, 2024).
Purpose: PAYG instalments are prepayments of business income tax, based on expected profits, to spread tax liability across the year and reduce large end-of-year tax bills.
Who It Applies To: Businesses with taxable income, especially sole traders, partnerships, or companies with fluctuating profits.
Typical Instalment Dates:
Pro Tip: Review instalment estimates quarterly to avoid underpayment penalties (2-4% above the base rate, ATO, 2025).
Some businesses report additional taxes on their BAS, depending on their industry.
Accurate BAS lodgement ensures compliance and supports cash flow management. In 2024, 20% of small businesses faced ATO audits due to BAS errors, with common issues in GST and PAYG reporting (ATO, 2024). Penalties can reach $1,566 for medium-sized businesses. BAS data also informs economic indicators, contributing to GDP estimates in 2023.
Understanding the elements of a BAS - GST, PAYG withholding, PAYG instalments, and other taxes—is vital for Australian businesses to stay compliant and financially healthy. By using digital tools and professional advice, you can streamline BAS processes. Visit ato.gov.au/BAS for more resources.
Use our free GST calculator here
A Business Activity Statement (BAS) is a form submitted to the Australian Taxation Office (ATO) to report and pay tax obligations including GST, PAYG withholding, PAYG instalments, and other taxes. It can be lodged monthly, quarterly, or annually depending on your business size and turnover. Over 2.5 million businesses lodged BAS in 2023-24, with small businesses making up 80% of submissions.
Businesses registered for GST (annual turnover of $75,000 or more, or $150,000 for non-profits) must lodge a BAS. Businesses with employees or contractors also need to report PAYG withholding. Some smaller businesses voluntarily register for GST to claim input tax credits on business purchases.
Late BAS submissions can result in penalties of up to $313 per day for overdue lodgements. Medium-sized businesses may face penalties up to $1,566. In 2024, 20% of small businesses faced ATO audits due to BAS errors, making timely and accurate lodgement crucial.
PAYG withholding is tax withheld from employee wages or contractor payments, ensuring income tax is collected throughout the year. PAYG instalments are prepayments of business income tax based on expected profits, helping spread tax liability across the year rather than facing large end-of-year bills.
GST calculation involves three key figures: G1 (total sales including all GST), 1A (GST collected on taxable sales at 10%), and 1B (GST paid on business purchases). The net GST amount (1A minus 1B) determines whether you owe GST or receive a refund. In 2023, 65% of small businesses had a net GST liability.
BAS due dates depend on your lodgement frequency:
Depending on your business type, you may need to report Fuel Tax Credits (for transport, agriculture, mining, or construction), Wine Equalisation Tax at 29% (for wineries and wine retailers), or Luxury Car Tax at 33% (for vehicles exceeding $73,346). In 2023-24, $7.2 billion in fuel tax credits were claimed across Australia.
Yes, you can vary PAYG instalments if your income fluctuates significantly. In 2023, 15% of businesses varied their instalments due to economic volatility. However, underestimating can result in penalties of 2-4% above the base rate, so regular review is recommended.
Digital accounting tools like Xero and MYOB can reduce GST errors by 30-40% according to ATO data. Single Touch Payroll (STP), mandatory since 2019, has reduced PAYG withholding errors by 35% through real-time reporting via payroll software.
In 2023, 60% of small businesses used certified BAS agents to ensure accurate lodgement and compliance. BAS agents can help navigate complex requirements, reduce errors, and provide ongoing advice for tax obligations. They're particularly valuable for businesses with multiple tax obligations or complex structures.
Scale Suite provides comprehensive BAS preparation and tax compliance services for Australian businesses. Our team understands the complexities of GST reporting, PAYG obligations, and various industry-specific taxes that may apply to your business.
BAS Preparation and Lodgement: We handle all aspects of BAS preparation including GST calculations, PAYG withholding reporting, and PAYG instalment management. Our systematic approach ensures accurate reporting across all relevant sections of your BAS, from basic GST obligations to specialised taxes like Wine Equalisation Tax or Fuel Tax Credits.
Tax Compliance Support: Our services extend beyond basic BAS lodgement to include ongoing compliance monitoring, deadline management, and regulatory updates. We work with businesses across various industries including transport, agriculture, hospitality, retail, and professional services to ensure all tax obligations are met accurately and on time.
Digital Integration: We utilise accounting software platforms including Xero and MYOB to streamline BAS processes and reduce errors. Our team can assist with Single Touch Payroll implementation and ensure your systems are optimised for accurate tax reporting throughout the year.
Advisory Services: Beyond compliance, we provide guidance on PAYG instalment variations, GST registration decisions, and cash flow planning around tax obligations. Our approach focuses on helping businesses understand their tax requirements while maintaining efficient financial operations.
Ongoing Support: We offer regular reviews of your tax position, assistance with ATO correspondence, and proactive advice on changes to tax legislation that may affect your business. Our goal is to provide reliable, professional support that gives you confidence in your tax compliance.
Scale Suite's BAS services are designed to integrate seamlessly with your existing business operations, providing expert tax management without disrupting your day-to-day activities. We work with businesses of all sizes, from sole traders to larger enterprises, adapting our services to meet specific industry requirements and business structures.
Use our free GST calculator here
We review and check our articles on a periodic basis to ensure accuracy and relevance. At the time of writing, this information was up to date based on our assessment of current Australian taxation requirements and ATO guidelines.
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