How to Fill Out a Business Activity Statement

A Business Activity Statement (BAS) is a form submitted to tax authorities for businesses to report and pay several business-related taxes. Generally, any business with a Goods and Services Tax (GST) registration must lodge a BAS. This typically applies to businesses with an annual turnover of $75,000 or more. The BAS simplifies tax obligations by allowing businesses to report and pay taxes like GST and employee income tax withholding in a single form.

Information and Calculations for Your BAS

Before you begin filling out your BAS, you must gather specific financial documents and perform several calculations. The necessary source documents include all sales invoices, expense receipts, bank statements, and detailed payroll records for the reporting period. It is important to ensure that all transactions you review fall within the correct BAS reporting period to maintain accuracy.

The first set of calculations relates to GST. You will need to determine your total sales for the period, the amount of GST you collected on those sales, and the amount of GST you paid on your business purchases. The method you use for these calculations, either cash or accrual accounting, depends on what you have registered with the tax office. Under the cash method, you account for sales and purchases when the money is actually received or paid, whereas the accrual method records them when the invoice is issued or received.

Another component to calculate is the Pay-As-You-Go (PAYG) withholding. This is the tax you have withheld from your employees’ wages and salaries during the period. Your payroll summary reports will contain this information, specifically the total gross wages paid and the total tax withheld from those wages.

Some businesses may also need to account for PAYG installments. This system involves making regular prepayments towards your expected annual income tax liability. The tax office typically provides the installment amount or rate that you are required to pay. This information is often pre-filled on the BAS form when lodging online, but it is good practice to have your own records available for verification.

Completing the BAS Form Section by Section

With all your figures calculated, you can proceed to complete the BAS form. This process involves transferring your calculated totals into the correct fields, or labels, on the statement.

At label G1, titled “Total Sales,” you will enter the total value of all sales your business made during the reporting period. This figure should include GST-free and input-taxed sales, and you should report whole dollars only, leaving out any cents. When entering this amount, do not round the dollar figure up or down.

The next relevant label is 1A, “GST on sales.” Here, you will report the total amount of GST you collected on your sales. For most goods and services, this is calculated at a rate of 10% of the sale price.

Following this, you will move to label 1B, “GST on purchases.” In this field, you enter the total amount of GST credits you are claiming for the GST included in the price of your business-related purchases. You can only claim credits for the portion of an expense used for your business.

For businesses with employees, the PAYG tax withholding section is next. At label W1, you report the total gross wages and other payments made to employees during the period. At label W2, you enter the total amount of tax you withheld from those payments, as detailed in your payroll records.

Label 4 is designated for other taxes, such as fringe benefits tax or luxury car tax, if they apply to your business. If you have no other tax obligations to report, you can leave this section blank. Finally, at label 5A, “PAYG income tax instalment,” you will enter the instalment amount provided by the tax office if you are required to make these payments.

Lodging and Finalising Your BAS

There are several methods available for lodging your completed statement. The most common and often preferred method is online through the tax office’s business portal or by using Standard Business Reporting (SBR) enabled software. Alternatively, you can lodge through a registered tax or BAS agent, or by mail.

Once your BAS is lodged, it will result in either a payment due to the tax office or a refund owed to you. If you have a payment to make, the due date will be specified on your BAS. Payments can be made through various methods, including electronic transfer, BPAY, or credit card, and you must use the correct payment reference number to ensure the funds are allocated to your account correctly. If you are due a refund, it is typically processed and paid directly into your nominated bank account within a couple of weeks.

You are legally required to keep all records that support the figures reported in your BAS for a minimum of five years. Maintaining these records is not just for compliance; it is also a defense in the event of a review or audit by the tax authorities.