Guidance on Utilising This BAS Compliance Checklist for SMEs

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Purpose:
Designed for Australian small and medium enterprises (SMEs), bookkeepers, and business owners, this comprehensive checklist ensures your Business Activity Statement meets all ATO requirements before lodgement. Work through 35 critical verification points across six key sections to minimize errors, avoid penalties, and ensure accurate reporting. Ideal for businesses lodging their own BAS or reviewing work prepared by bookkeepers.
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Tips for Ongoing Use:
Bookmark this page (Ctrl+D or Cmd+D) and use it for every BAS lodgement cycle - whether monthly, quarterly, or annually. Start the checklist 3-5 days before your lodgement deadline to allow time for corrections. Your progress is automatically saved in your browser, so you can complete it over multiple sessions. Print or save a PDF copy for your records to demonstrate due diligence in case of an ATO audit.
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Understanding BAS Compliance Basics:
‍The Business Activity Statement (BAS) is a critical ATO obligation for registered businesses. It reports and pays GST, PAYG withholding, and PAYG instalments. Errors in BAS lodgement can result in penalties ($313 for small businesses, $1,565 for large), interest charges on underpaid amounts, and increased audit risk. Common mistakes include miscalculated GST, missing transactions, incorrect PAYG withholding amounts, and reconciliation errors. This checklist addresses all these areas systematically.‍

Key Sections Explained:
1. GST Verification (8 items): This section ensures all sales and purchases are correctly recorded with appropriate GST treatment. You'll verify that GST-free sales (like exports, education, health) and input-taxed sales (like residential rent, financial supplies) are properly categorized. The GST control account reconciliation is critical - it should match your BAS amounts exactly. Label G1 (total sales) must equal your revenue from your accounting system. These checks prevent the most common BAS errors that trigger ATO queries.
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2. PAYG Withholding (5 items): If you have employees or contractors, this section verifies all withholding amounts are correct. Check that all payroll has been processed and reported through Single Touch Payroll before lodging your BAS. Verify the 47% withholding on contractors who haven't provided an ABN. Labels W1 (gross payments) and W2 (total withheld) must match your payroll reports exactly. STP must be up to date - the ATO can see your STP data and will identify discrepancies.
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3. PAYG Instalments (4 items): This section covers income tax instalments. Confirm your instalment rate from your latest notice of assessment or previous BAS. Calculate business and investment income accurately for the period. Consider varying your instalment if your income has dropped significantly (more than 15%) to avoid overpaying—you can request a refund at tax time. Ensure labels T1 and T2 are completed correctly using either the instalment rate method or GDP-adjusted method.
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4. Bank Reconciliation & Records (6 items): Arguably the most important section for accuracy. All bank accounts must be reconciled to the last day of the reporting period with zero discrepancies. Every transaction must be categorized - no "ask my accountant" or uncategorized items. This ensures your BAS reflects actual financial activity. Supporting documentation (invoices, receipts) must be filed and accessible—the ATO requires you to retain records for five years. Inter-account transfers should not appear as income or expenses.
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5. Review & Accuracy Checks (7 items): Compare your current BAS to previous periods—large variations should have clear explanations (like seasonal changes or one-off transactions). Check for transposition errors in dollar amounts (like entering $1,234 instead of $12,345). Verify your ABN and business details are current with the ATO. Confirm you're using the correct BAS form - some businesses need simplified BAS, others need the full version. Consider voluntary disclosure if you've discovered errors in previous BAS. An unexpectedly large payment or refund should trigger a double-check. If possible, have a second person review before lodging.
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6. Lodgement Readiness (5 items): Confirm your due date - monthly BAS is due on the 21st of the following month; quarterly is generally 28 days after quarter-end (or later if using a registered tax agent). Ensure you can access the ATO Business Portal or have your tax agent lodgement arranged. If you'll owe money, ensure funds are available or a payment plan is arranged before lodging. Create a backup of your completed BAS and all supporting documentation. Know your lodgement method - online via Business Portal, through accounting software, or via your tax agent.

Benefits for SMEs:
This checklist dramatically reduces BAS errors and the stress of lodgement. Businesses using systematic pre-lodgement checks report 90% fewer ATO queries and amendments. The average cost of correcting a BAS error (including accountant time, penalties, and interest) is $800-2,500—this free tool helps you avoid those costs. Regular use builds confidence in your financial reporting and creates a documented compliance process that protects you during audits.

Fair Work & ATO Adherence:
This checklist reflects current ATO requirements as of November 2025. BAS obligations vary by business structure, turnover, and registration type. For complex situations (like fuel tax credits, wine equalization tax, or luxury car tax), consult a registered BAS agent. Visit the ATO BAS Lodgement Guide for official information, or contact Scale Suite for professional BAS preparation and lodgement services.