How bas works
A GST-registered business reports on a monthly, quarterly or annual cycle set by the ATO based largely on its turnover and reporting history. The BAS brings together GST on sales, labelled 1A, GST on purchases, labelled 1B, PAYG withholding on employee wages and any PAYG income tax instalments into one combined statement covering the period, rather than separate individual filings for each obligation the business carries.
Getting the BAS right depends on transactions being coded to the correct GST treatment consistently throughout the period, not fixed retrospectively at lodgment time when it is often too late to catch every error cleanly. Only a TPB-registered BAS agent or the business itself may lodge a BAS, so the workpapers behind it need to be accurate and ready well before the actual deadline arrives.
Example
A Sydney retailer lodges its BAS quarterly, as is common for a business of its size. Over the quarter it collected $8,800 GST on sales and paid $3,300 GST on stock and expenses, a net GST liability of $5,500. It also withheld $4,200 PAYG tax from staff wages during the same period. Its BAS workpapers show a total amount payable of $9,700, which its TPB-registered BAS agent reviews and lodges with the ATO by the due date.
BAS in QuickBooks Online vs Xero
QuickBooks Online's GST Centre prepares BAS figures automatically from coded transactions, ready for review before lodgment by a registered agent. Xero's Activity Statement report pulls the same GST, PAYG withholding and instalment figures into a lodgment-ready layout for the business or its BAS agent to check line by line.
Common mistakes
- Transactions are coded to the wrong GST treatment throughout the quarter, and the error is only discovered at lodgment time when it is too late to fix cleanly.
- A business assumes a bookkeeping provider can lodge the BAS directly, when only a TPB-registered BAS agent or the business itself may lodge it.
- PAYG withholding and GST figures are reconciled separately instead of together, causing the combined BAS amount payable to be calculated incorrectly.
Why it matters
The BAS brings GST, PAYG withholding and instalments into one statement, so an error in any one figure affects the total amount an Australian business owes the ATO. Because only a TPB-registered BAS agent or the business itself may lodge it, workpapers need to be accurate well before the deadline arrives. For business owners and their BAS agents, clean coding through the quarter keeps lodgment a review step instead of a last-minute reconstruction.
Related terms
How LedgerBPO handles bas
We code transactions correctly through the period, reconcile GST and PAYG withholding accounts, and prepare BAS workpapers ready for your TPB-registered BAS agent or accountant, who reviews and lodges the statement with the ATO. We never lodge a BAS ourselves under any circumstance.