Have you ever wondered why GST and BAS lodgements are so important for businesses? If you’re a business owner, a freelancer, or just starting out, understanding GST (Goods and Services Tax) and how to lodge your BAS (Business Activity Statement) is essential for staying compliant and managing your cash flow effectively.
While the process might seem overwhelming at first, this guide breaks it all down into simple steps using clear language and a professional tone—without any jargon.
We’ll also walk you through how to calculate GST, when to lodge your BAS, and how tax agents or a tax accountant in Melbourne can make the entire process easier.
1. What Is GST?
Goods and Services Tax (GST) is a 10% tax added to most goods and services sold by registered businesses. If your business earns $75,000 or more per year ($150,000 for non-profits), you must register for GST.
Once registered, you’re expected to collect GST on your sales and pay it to the government while also claiming credits for GST paid on business purchases.
Key points to know about GST:
- Charged at 10% on most goods and services
- Collected by businesses and remitted to the ATO
- You can claim GST credits for the GST paid on your business-related expenses
- Requires accurate record-keeping and regular reporting
If you’re unsure whether your business should register, a tax accountant or personal accountant can help you evaluate your income levels and obligations.
2. What Is BAS Lodgement?
The Business Activity Statement (BAS) is a form submitted to the Australian Taxation Office (ATO) that reports your business taxes, including GST, PAYG withholding, PAYG installments, and other obligations.
Who needs to lodge a BAS?
- Businesses registered for GST
- Sole traders, companies, partnerships, and trusts with GST obligations
- Businesses paying wages (reporting PAYG)
What does BAS include?
- GST collected on sales
- GST paid on purchases (credits)
- Ongoing PAYG tax deductions or pre-paid instalments
- Other taxes depending on the business structure
Your business turnover determines how frequently you’re required to lodge BAS. Most small businesses lodge quarterly, but some may do it monthly or annually. A tax consultant can advise which schedule suits your needs.
3. How To Calculate GST?
Once you’re registered for GST, you’ll need to calculate:
A. GST on Sales (Output Tax)
This refers to the GST you charge your customers when selling goods or services.
Formula: Sale price × 10% = GST collected
Example: If you sell a product for $220 (including GST), you’ve collected $20 in GST.
B. GST on Purchases (Input Tax Credit)
This is the GST charged on items or services you buy to run your business. You can claim it back.
Formula: Purchase price ÷ 11 = GST paid
Example: If you purchase office supplies for $110, the included GST amount is $10.
C. Net GST to Pay or Receive
Formula: GST collected − GST paid = GST payable or refundable
If positive: You owe GST to the ATO
If negative: You get a GST refund
These calculations form a major part of your BAS lodgement. Many business owners hire a tax accountant to ensure calculations are accurate.
4. How To Lodge Your BAS?
Several options are available for lodging your BAS:
A. Online through the ATO Portal
You can lodge through the ATO’s Business Portal if you’re managing your finances directly. Make sure you’re keeping accurate records and calculations.
B. Through Your Accounting Software
Cloud platforms like Xero, MYOB, or QuickBooks offer BAS reporting features. They streamline the process by automatically calculating GST based on your recorded sales and purchases.
C. With a Registered Tax Agent or Accountant
A tax accountant in Melbourne or a registered BAS agent can lodge on your behalf. This is often the safest and easiest route, especially if your finances are complex.
Working with tax consultants ensures your BAS lodgement meets deadlines and reduces the risk of errors or penalties.
5. When To Lodge BAS?
Your BAS lodgement schedule depends on your business size:
Quarterly (Most Common)
- Due 28 days following the end of each quarter
- Example: Jan–Mar BAS is due 28 April
Monthly
- Required to be lodged by the 21st of the next calendar month
- Suitable for businesses with high GST turnover
Annually
- For some businesses voluntarily registered for GST
- Due with your income tax return
Arriving on time is critical. Late lodgement may lead to penalties or interest charges, so using tax agents or personal accountants can help you stay on top of obligations.
6. Importance of Record-Keeping
To ensure correct BAS and GST lodgement, always keep accurate records:
- Sales and purchase invoices
- Bank statements
- Payroll records (if applicable)
- Copies of previous tax returns
Cloud accounting software is handy here, but even with digital tools, a professional tax accountant or tax consultants can review your entries for peace of mind.
7. Common Mistakes To Avoid
A. Mixing business and personal expenses
Always separate personal and business finances. Mixing them can lead to incorrect GST claims.
B. Forgetting to claim GST credits
If you forget to claim input tax credits, you may pay more than necessary.
C. Missing deadlines
Late BAS lodgement can lead to penalties. Set reminders or ask a tax accountant to manage this.
D. Incorrect GST calculations
Always double-check your math or use software with built-in GST features.
Conclusion
GST and BAS lodgement are essential parts of running a business. While it might seem complicated, once you understand the basics—what GST is, how to calculate it, and how to lodge your BAS—you’re in a stronger position to manage your business finances with confidence.
At KPG Taxation, we specialise in helping individuals and businesses manage their GST and BAS obligations with ease. Our experienced team ensures your lodgements are accurate, timely, and fully compliant with ATO requirements. Whether you’re a sole trader or running a growing business, we have adapted services to meet your needs and simplify the entire process.
Take the stress out of tax time and let KPG Taxation handle your GST and BAS with confidence.
