Complete BAS Lodgement Guide for Australian Businesses 2026

Complete BAS Lodgement Guide for Australian Businesses 2026

The Business Activity Statement (BAS) is a tax reporting requirement for Australian businesses registered for GST. Whether you're a sole trader in Perth, a partnership in Adelaide, or a company in Sydney, understanding BAS lodgement is essential for ATO compliance. This guide covers everything you need to know for 2026.

What is a Business Activity Statement?

A BAS is a form submitted to the Australian Taxation Office (ATO) to report and pay several tax obligations:

Goods and Services Tax (GST) — The 10% tax on most goods and services sold or consumed in Australia. Pay As You Go (PAYG) Withholding — Tax withheld from employee wages and other payments. PAYG Instalments — Prepaid income tax based on your business income. Fringe Benefits Tax (FBT) Instalments — If applicable to your business.

Who Must Lodge a BAS?

You must lodge a BAS if your business:

Is registered for GST — Mandatory if your annual turnover is $75,000 or more ($150,000 for non-profit organisations). Withholds tax from payments — If you have employees or make payments requiring PAYG withholding. Pays PAYG instalments — Required for businesses with income above certain thresholds.

BAS Lodgement Frequencies

The ATO determines your lodgement frequency based on your business's GST turnover:

Quarterly BAS (Most Common)

For businesses with GST turnover under $20 million. Due dates:

- Quarter 1 (July-September): 28 October

- Quarter 2 (October-December): 28 February

- Quarter 3 (January-March): 28 April

- Quarter 4 (April-June): 28 July

Monthly BAS

Required for businesses with GST turnover of $20 million or more. Due on the 21st day of the following month.

Annual GST Return

Available for businesses with GST turnover under $75,000 who voluntarily registered. Due with your income tax return.

GST Reporting Methods

Choose the method that best suits your business:

Calculation Method (Actual Figures)

Report actual GST collected and paid based on your records. Most accurate but requires detailed bookkeeping.

Instalment Method

The ATO calculates a quarterly instalment amount based on your previous year's GST. Simpler but may not reflect current performance. You still need to report annual GST.

Step-by-Step BAS Preparation

Step 1: Reconcile Your Accounts

Before preparing your BAS, ensure your accounting records are complete:

- Bank accounts are reconciled

- All invoices are entered

- Supplier bills are recorded

- Payroll is up to date

Step 2: Review GST Coding

Check that transactions are correctly coded:

- GST-free items (basic food, medical services, exports)

- Input-taxed items (financial services, residential rent)

- Capital purchases over $1,000

- Out-of-scope items (wages, loan repayments)

Step 3: Calculate GST Collected (1A)

Total GST collected on sales. Your accounting software should calculate this automatically from GST-coded sales invoices.

Step 4: Calculate GST Credits (1B)

Total GST paid on business purchases. Ensure you have valid tax invoices for all claims over $82.50.

Step 5: Calculate Your GST Payable or Refund

GST Collected (1A) minus GST Credits (1B) = Your GST liability or refund.

Step 6: Report PAYG Withholding (W1-W5)

If you withhold tax from:

- Employee wages (W1)

- Director fees

- Contractor payments (if required)

- Dividend payments (if applicable)

Step 7: Report PAYG Instalment (T7-T11)

If you pay PAYG instalments, report either the ATO-calculated amount or calculate your own based on current income.

Common BAS Mistakes to Avoid

Incorrect GST Classification

Common errors include:

- Claiming GST on GST-free purchases (bank fees, wages, insurance)

- Not claiming GST on eligible purchases

- Incorrectly treating input-taxed supplies

Missing Tax Invoices

You must hold valid tax invoices for GST credits over $82.50. Without them, the ATO can deny your claims.

Late Lodgement

Lodging late attracts failure to lodge penalties and interest charges. Mark due dates in your calendar.

Cash vs Accrual Confusion

Know which accounting method you use:

- Cash Basis: Report GST when you receive or make payments

- Accrual Basis: Report GST when invoices are issued or received

Private Use Claims

Only claim GST credits for the business portion of mixed-use purchases (vehicles, phones, home office).

What is a Valid Tax Invoice?

For GST credits, you need tax invoices that include:

For purchases under $1,000:

- Supplier's identity or ABN

- Invoice date

- Description of goods/services

- GST amount (or statement that GST is included)

- Total price

For purchases $1,000 and over:

All of the above, plus:

- Your identity or ABN

- Quantity of goods or extent of services

Lodging Your BAS

Online via myGov/ATO Business Portal

The ATO's free online service for lodging BAS. Link your myGov account to the ATO.

Through Accounting Software

Xero, MYOB, QuickBooks, and other approved software can lodge directly to the ATO.

Via Your BAS or Tax Agent

Registered agents can lodge on your behalf and may get extended due dates.

Paper BAS

Only available if you've been granted an exemption from electronic lodgement.

Payment Options

Pay your BAS liability by:

BPAY — Use your payment reference number (PRN) from the BAS. Direct Debit — Set up automatic payments through the ATO Business Portal. Direct Credit — Transfer directly to the ATO's bank account with your PRN. At Australia Post — For amounts up to $20,000.

What If You Can't Pay?

Contact the ATO before your due date if you're unable to pay:

Payment Plans — Arrange to pay in instalments. Interest charges apply. Deferrals — Request a short-term deferral due to hardship. Activity Statement Varying — If your instalment amount is too high, you may be able to vary it.

The ATO is generally more understanding if you contact them proactively.

Record Keeping Requirements

You must keep BAS-related records for 5 years:

- Sales and income records

- Purchase records and tax invoices

- Bank statements

- Wage records and payment summaries

- Any worksheets used to calculate BAS figures

When to Get Professional Help

Consider engaging a BAS agent or accountant if:

- Your business is growing and transactions are complex

- You're claiming significant GST credits

- You have employees and complex PAYG requirements

- You're unsure about GST classifications

- You've received ATO correspondence you don't understand

BAS Agent vs Tax Agent

BAS Agents — Can prepare and lodge BAS and provide advice on GST, PAYG withholding, and superannuation matters. Tax Agents — Can do everything a BAS agent does plus prepare income tax returns and provide broader tax advice.

Penalties for Non-Compliance

The ATO applies penalties for:

Late Lodgement — $313 per 28-day period (or part thereof) up to $1,565 maximum for small entities. False or Misleading Statements — Penalties based on the tax shortfall amount, from 25% to 75% of the shortfall. Failure to Keep Records — Up to $11,100 for individuals, more for companies.

Key Dates for 2026

Mark these quarterly BAS due dates:

- 28 February 2026 — October-December 2025 quarter

- 28 April 2026 — January-March 2026 quarter

- 28 July 2026 — April-June 2026 quarter

- 28 October 2026 — July-September 2026 quarter

BAS Checklist

Before lodging, confirm:

☐ All bank accounts reconciled

☐ Outstanding invoices entered

☐ GST coding reviewed

☐ Tax invoices held for credits over $82.50

☐ PAYG withholding matches payroll reports

☐ Private use adjustments made

☐ Previous BAS amounts checked against ATO records

Accurate, timely BAS lodgement keeps your business compliant and avoids costly penalties. If BAS preparation feels overwhelming, the investment in a qualified BAS or tax agent often pays for itself in accuracy and peace of mind.