BAS for Sole Traders: A Complete Step-by-Step Guide

If you're a sole trader registered for GST in Australia, you need to lodge a Business Activity Statement (BAS) — usually quarterly. It sounds intimidating, but once you understand the basics, it's straightforward.

What is a BAS?

A BAS is a form you submit to the ATO to report and pay several tax obligations, including:

• GST — the goods and services tax you've collected and paid
• PAYG instalments — pay-as-you-go income tax instalments
• PAYG withholding — tax withheld from payments to employees or contractors (if applicable)

For most sole traders without employees, the BAS is primarily about GST.

When is BAS due?

If you lodge quarterly (most common for sole traders):

| Quarter | Period | Due date | | --- | --- | --- | | Q1 | July – September | 28 October | | Q2 | October – December | 28 February | | Q3 | January – March | 28 April | | Q4 | April – June | 28 July |

If your accountant or tax agent lodges on your behalf, you may get extended deadlines. Check with them.

How GST works on your BAS

The core BAS calculation for GST is simple:

GST collected (on your sales) minus GST paid (on your business purchases) = GST payable (what you owe the ATO)

If you paid more GST on purchases than you collected on sales, you get a refund.

Example

• You invoiced clients $55,000 (inc. GST) during the quarter
• That means you collected $5,000 in GST (10% of $50,000)
• You spent $11,000 (inc. GST) on business expenses
• That means you paid $1,000 in GST on purchases
• GST payable = $5,000 - $1,000 = $4,000

You owe the ATO $4,000 for the quarter.

Reporting methods: cash vs. accrual

Cash basis (most common for sole traders under $10M turnover):

• Report GST when you receive payment or make payment
• Simpler — matches your bank account

Accrual basis:

• Report GST when you issue an invoice or receive a bill
• More complex — requires tracking unpaid invoices and bills

Most sole traders should use the cash basis unless their accountant advises otherwise.

Step-by-step: preparing your BAS

1. Gather your records — all invoices issued, all receipts/expenses, and bank statements for the quarter
2. Calculate GST collected — add up the GST component of all payments received
3. Calculate GST paid — add up the GST component of all business purchases with valid tax invoices
4. Calculate the difference — GST collected minus GST paid
5. Check PAYG instalment — the ATO may calculate this for you (amount appears on your BAS form)
6. Lodge via myGov/ATO — submit the BAS through your myGov account or through your tax agent
7. Pay what you owe — by the due date to avoid penalties

Common BAS mistakes

Claiming GST on non-GST expenses. Some things don't have GST: bank fees, government charges, most insurance premiums, and basic food. Don't claim GST credits on these.

Missing the deadline. Late BAS lodgement attracts penalties. The ATO charges a failure-to-lodge penalty of $313 for each 28-day period (or part thereof) the BAS is late, up to a maximum of $1,565 (2025-26 rates).

Not keeping receipts. You need a valid tax invoice to claim GST credits. No invoice, no credit.

Forgetting to set aside GST. Don't spend the GST you collect. It's the ATO's money. Set aside 10% of every payment into a separate account.

PAYG instalments

If you earn over a certain amount, the ATO may require you to make quarterly PAYG income tax instalments. This is separate from GST — it's prepaying your income tax throughout the year instead of one lump sum at tax time.

The ATO usually calculates your PAYG instalment amount for you. It appears on your BAS form. You can choose between:

• Instalment amount method — the ATO tells you what to pay
• Instalment rate method — you apply a rate to your actual income each quarter

How AdminZero helps

AdminZero automatically tracks your GST collected and GST paid throughout the quarter. At BAS time, you get a ready-made summary showing exactly what you owe — with conservative estimates so you're never caught short.

It also reminds you 14 days and 3 days before each BAS deadline, so you never miss a lodgement.

Disclaimer: This guide is for general information only. It is not tax advice. Always consult a registered tax agent for advice specific to your situation.