GST

BAS Lodgement Guide for Australian Small Businesses (2026)

21 June 2026 · 9 min read

Quick Answer

A Business Activity Statement (BAS) reports your GST collected, GST paid on purchases, PAYG withholding, and PAYG instalments to the ATO. Most small businesses lodge quarterly — the Q4 2025–26 BAS is due 28 July 2026. Lodge on time or face a Failure to Lodge penalty of one penalty unit ($330) per 28 days overdue.

Every Australian business registered for GST has one unavoidable obligation: lodging a Business Activity Statement. It sounds bureaucratic, and it is — but get it wrong and the ATO will charge you $330 for every 28 days the form sits unlodged, on top of any tax debt you owe.

A BAS is more than a GST return. It also captures PAYG withholding (the tax you deduct from employee wages), PAYG instalments (prepaid tax on your own business income), fuel tax credits, and wine equalisation tax if those apply. Understanding what belongs in each label on the form is the difference between a 20-minute quarterly task and a costly correction.

This guide walks through every section of the BAS — who must lodge, what figures go where, when it's due in 2026, how to lodge electronically, and what to do if you can't pay on time. If you're using accounting software like SAB Account AI, most of the numbers are calculated automatically; this post explains the logic behind them so you can check the output with confidence.

Who Must Lodge a BAS — and How Often

Any business that is registered for GST must lodge a BAS. GST registration is compulsory once your GST turnover reaches $75,000 per year ($150,000 for non-profit bodies). Voluntary registration is allowed below those thresholds, but once you register, BAS lodgement is mandatory — you cannot simply choose not to lodge because you had a quiet quarter.

The ATO assigns your reporting frequency when you register. Most small businesses with a GST turnover under $20 million are placed on a quarterly cycle. Businesses with a turnover of $20 million or more must lodge monthly. Very small businesses with a turnover under $75,000 who have voluntarily registered for GST can elect to lodge annually, but they must still pay GST instalments quarterly. If your circumstances change — for example, turnover jumps above $20 million — contact the ATO to change your reporting period.

Sole traders with employees also report PAYG withholding on their BAS. The frequency of PAYG withholding reporting depends on how much you withhold annually: small withhholders (under $25,000 per year) report quarterly; medium withholders ($25,000–$1 million) report monthly. This means some businesses will have a monthly BAS for PAYG but a quarterly BAS for GST — the ATO issues an Instalment Activity Statement (IAS) for the non-GST months in that case.

Rule: Once registered for GST, you must lodge a BAS even if your turnover was $0 for the period. Nil BAS lodgements still have the same due dates and the same penalties for lateness.

BAS Lodgement Frequency at a Glance

Compulsory GST registration: $75,000 turnover for businesses, $150,000 for non-profits
Quarterly BAS: most businesses under $20 million GST turnover
Monthly BAS: businesses with $20 million+ GST turnover
Annual GST lodgement option: voluntarily registered businesses under $75,000 turnover
Small PAYG withholder threshold: under $25,000 withheld annually (quarterly reporting)

What Goes on Your BAS — Label by Label

The BAS form uses letter-and-number labels. Understanding what each label means stops you from entering figures in the wrong box — a common error that triggers ATO reviews. The core GST section works like this: G1 is your total sales (including GST where applicable); G2 is export sales (GST-free); G3 is other GST-free sales; G10 is your total capital purchases; G11 is your total non-capital purchases. The ATO uses these to calculate 1A (GST on sales) and 1B (GST credits on purchases).

Label 1A is the GST you collected from customers — one-eleventh of your GST-inclusive sales. Label 1B is the GST credits you can claim on business purchases — one-eleventh of GST-inclusive expenses where you hold a valid tax invoice. The difference between 1A and 1B determines whether you owe the ATO money or receive a refund. If 1A is greater than 1B, you pay. If 1B is greater than 1A — common for businesses with large capital purchases — the ATO refunds the difference.

PAYG withholding sits in labels W1 (total wages and other payments subject to withholding) and W2 (the actual tax withheld). W2 flows through to label 4 (total PAYG withheld) on the payment summary section. PAYG instalments appear at label T7 if you're paying in quarterly instalments calculated by the ATO, or T1 if you're using the income times rate method. If you have employees, note that from 1 July 2026 — ten days away — Payday Super takes effect, meaning superannuation must be paid on each payday rather than quarterly. This will tighten your cash flow timing even though super itself doesn't appear on the BAS.

Tax invoice rule (ATO): You cannot claim a GST credit at 1B unless you hold a valid tax invoice for purchases over $82.50 (GST-inclusive). For purchases under $82.50, a receipt is sufficient. Missing invoices are the single most common reason BAS credits are disallowed.

Key BAS Labels Explained

G1: Total sales (GST-inclusive where applicable)
1A: GST collected — one-eleventh of GST-inclusive sales
1B: GST credits — one-eleventh of GST-inclusive purchases with valid tax invoices
W1: Total salary, wages, and other withholding payments
W2: Total tax withheld from those payments
T7: ATO-calculated PAYG instalment amount (or T1 for income × rate method)

BAS Due Dates for 2025–26 and 2026–27

The ATO sets standard quarterly due dates, but registered BAS agents receive an extended lodgement date — typically four to six weeks later than the standard deadline. If you lodge through a tax agent or BAS agent, confirm which deadline applies to you. The standard quarterly schedule for FY2026 is: Q1 (July–September 2025) due 28 October 2025; Q2 (October–December 2025) due 28 February 2026; Q3 (January–March 2026) due 28 April 2026; Q4 (April–June 2026) due 28 July 2026.

For FY2027, the same pattern applies: Q1 due 28 October 2026, Q2 due 28 February 2027, Q3 due 28 April 2027, Q4 due 28 July 2027. If a due date falls on a weekend or public holiday, the next business day becomes the deadline — the ATO confirms this in their payment calendar each year.

Monthly lodgers must submit by the 21st of the following month. So a June 2026 monthly BAS is due 21 July 2026. If you pay electronically through the ATO's online services, the payment deadline matches the lodgement deadline. Paper lodgements have an earlier deadline — the ATO sends a pre-addressed envelope with the BAS form, but the date printed on that envelope is generally one week before the electronic deadline. SAB Account AI tracks all your BAS due dates automatically and sends reminders 14 days and 3 days before each deadline.

URGENT: Q4 FY2026 BAS (April–June 2026) is due 28 July 2026 — that is 37 days away. If you haven't reconciled June transactions yet, start now. Late lodgement penalty: $330 per 28-day period, capped at $1,650 for very small businesses under the Failure to Lodge (FTL) penalty framework.

How to Lodge Your BAS — Step by Step

The fastest and most accurate way to lodge is through ATO Online Services for Business or through accounting software that has a direct ATO lodgement connection. Paper lodgement is still available but adds processing time and increases manual data entry errors. If you use a registered BAS agent, they lodge on your behalf and you get the extended deadline — BAS agents must be registered with the Tax Practitioners Board (TPB).

Here is the practical lodgement process if you're doing it yourself. Step 1: reconcile your bank account for the period — every dollar in and out must match your accounting records. Step 2: identify all GST-inclusive sales and generate your G1 figure. Step 3: identify all GST-inclusive purchases and confirm you hold tax invoices — generate your 1B figure. Step 4: calculate PAYG withholding from payroll records (W1 and W2). Step 5: log into ATO Online Services for Business using myGovID, prefill where prompted, enter your figures, review the net amount payable or refundable, and submit. Step 6: pay any amount owing by the due date via BPAY, direct debit, or credit card through the ATO portal.

If your accounting software is connected to the ATO — as SAB Account AI is — the software pre-populates G1, G10, G11, 1A, 1B, W1, and W2 from your transaction data. You review the figures, confirm they're accurate, and click lodge. The ATO receives the data in real time. Keep your reconciliation workpapers for five years — the ATO can audit any BAS period within that window under the Taxation Administration Act 1953.

myGovID requirement: To access ATO Online Services for Business directly, you need a myGovID with Standard or Strong identity strength linked to your ABN via the Relationship Authorisation Manager (RAM). Set this up before your first BAS is due — it takes up to 72 hours to verify.

BAS Lodgement Checklist

Reconcile bank accounts before touching the BAS form
Confirm tax invoices exist for every purchase over $82.50
Lodge via ATO Online Services for Business or connected accounting software
Pay by BPAY, direct debit, or ATO credit card facility by the due date
Retain all BAS workpapers and invoices for 5 years

Common BAS Mistakes That Trigger ATO Reviews

The ATO uses data-matching technology to compare your BAS figures against Single Touch Payroll data, third-party payment platforms, and industry benchmarks. Consistent underreporting of GST collected relative to your industry peers will flag your account for review. The five most common mistakes Australian small businesses make on their BAS are: claiming GST credits on private expenses, failing to include all sales (including online platform sales reported to the ATO by Airbnb, Uber, Etsy, and others), misclassifying GST-free and input-taxed supplies, not reconciling the BAS to the actual bank account balance, and incorrectly reporting wages in W1.

GST-free supplies are a common source of confusion. Fresh food, most health services, childcare, and exports are GST-free — you charge 0% GST and can still claim credits on related purchases. Input-taxed supplies — such as residential rent and financial services — have no GST charged and no GST credits claimable on related costs. If you mix these with taxable supplies and enter them all in G1 with a 10% rate applied, you will either overclaim 1A or underclaim 1B, both of which the ATO can assess.

Claiming the GST component of a personal expense is the fastest way to end up with an ATO audit. Under the A New Tax System (Goods and Services Tax) Act 1999, a GST credit is only available for a creditable acquisition — something acquired for a creditable purpose, meaning in the course of your enterprise. The private-use portion of a mixed-use purchase (like a mobile phone used 40% privately) must be excluded from your 1B claim. Keep a usage diary for the first year of any mixed-use asset to establish your business-use percentage.

ATO benchmark alert: If your reported gross profit margin or GST ratio falls significantly outside the ATO's Small Business Benchmarks for your industry, your account may be selected for a review or audit. Check where your business sits at ato.gov.au/sb-benchmarks each year before lodging your annual tax return.

What to Do If You Can't Pay Your BAS on Time

Lodging and paying are two separate obligations. Even if you cannot pay the full amount owing, always lodge on time. The Failure to Lodge penalty ($330 per 28 days) accumulates regardless of whether tax is owed — lodging a nil or unpaid BAS stops the FTL clock. General Interest Charge (GIC) applies to unpaid tax amounts from the due date; the GIC rate for Q2 2026 is 11.36% per annum (updated quarterly by the ATO). That compounds daily, so every week of delay is more expensive than the last.

If you genuinely cannot pay, contact the ATO before the due date and request a payment plan through Online Services for Business or by calling 13 72 26. The ATO will generally approve a payment plan for small businesses with a good lodgement history. Under a payment plan, GIC continues to accrue on the outstanding balance, but the ATO will not take debt recovery action while you're meeting plan instalments. You can also apply for remission of GIC or FTL penalties if you have a valid reason — illness, natural disaster, or ATO system failure qualify; cash flow pressure alone generally does not.

Cash flow planning ahead of each BAS quarter is the real solution. SAB Account AI calculates your estimated BAS liability in real time as you record sales and expenses throughout the quarter — so there are no surprises on day 28. Setting aside the GST component (one-eleventh of each GST-inclusive sale) into a separate bank account each week is the simplest discipline for staying solvent at BAS time.

GIC rate (Q2 2026): 11.36% per annum, compounding daily on unpaid BAS amounts. On a $10,000 BAS debt left unpaid for 90 days, that adds approximately $280 in interest before any FTL penalty. Lodge on time, even if you can't pay in full.

Let SAB Account AI calculate your BAS figures automatically, track every due date, and pre-fill your lodgement — so you spend 20 minutes on your BAS instead of half a day.

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Frequently asked questions

When is my BAS due in 2026?

For quarterly lodgers, Q4 FY2026 (April–June 2026) is due 28 July 2026. If you lodge through a registered BAS agent, an extended deadline typically applies — confirm the exact date with your agent.

What is a BAS and what does it include?

A Business Activity Statement (BAS) is a form submitted to the ATO that reports GST collected (label 1A), GST credits on purchases (label 1B), PAYG withholding from employee wages (W2), and PAYG instalments on business income. It covers the reporting period — monthly, quarterly, or annual — depending on your ATO registration.

Do I need to lodge a BAS if I had no income this quarter?

Yes. If you are registered for GST, you must lodge a nil BAS even if turnover was $0 for the period. Failure to lodge attracts a penalty of $330 per 28-day period under the ATO's Failure to Lodge penalty framework.

Can I claim GST on all my business expenses on my BAS?

No. You can only claim GST credits (at label 1B) for purchases that are creditable acquisitions under the GST Act — business-purpose purchases with a valid tax invoice for amounts over $82.50 (GST-inclusive). Private expenses and input-taxed supplies (like residential rent) do not attract GST credits.

What is the penalty for lodging a BAS late?

The Failure to Lodge penalty is $330 per 28-day period the BAS remains unlodged, up to a maximum of $1,650 for very small businesses. General Interest Charge (11.36% per annum for Q2 2026) also accrues on any unpaid tax from the original due date.

What is the difference between a BAS and an IAS?

A BAS (Business Activity Statement) is for businesses registered for GST and covers GST plus PAYG. An IAS (Instalment Activity Statement) is for businesses not registered for GST — or for monthly PAYG reporting periods in between quarterly BAS lodgements — and covers PAYG withholding or instalments only.

How do I lodge my BAS online?

Log into ATO Online Services for Business using your myGovID (Standard or Strong identity strength) linked to your ABN via RAM, select Activity Statements, complete the form, and submit. Alternatively, connected accounting software like SAB Account AI can pre-fill and lodge directly to the ATO.

Does super appear on the BAS?

No — superannuation guarantee contributions are not reported on the BAS. They are paid directly to employees' super funds and reported through the ATO's SuperStream system. However, from 1 July 2026, Payday Super requires super to be paid on each payday, which will significantly affect cash flow timing alongside quarterly BAS payments.