Suitable for: Sole traders who need to lodge a BAS
Tax Difficulty: Easy
Airtax Experience: First-time users
Time to Read: 5-6 minutes
A Business Activity Statement (BAS) is a tax lodgement that all sole traders who are registered for GST are required to submit to the ATO, on either a monthly or quarterly basis. A BAS tracks the GST you have collected from your business sales, and the GST credits you are entitled to through your business expenses, over a given reporting period.
In this Help Centre article, we’ll break down exactly what this means and how you can easily lodge your next BAS through Airtax.
A quick reminder: GST stands for Goods and Services Tax, and is a 10% tax charged on most goods and services supplied in Australia. As a sole trader supplying goods or performing services, you collect GST from your customers when they pay you revenue, and you pay GST on certain expenses that help you run your business operation.
- Do I need to lodge a BAS?
- A simple BAS explanation
- How Airtax makes lodging BAS a breeze
- How to lodge on Airtax
- Final tips and guidance
Do you need to lodge a BAS?
Before you read further, let’s have a quick check to make sure you need to be registered for GST. In short, if you earn over $75,000 from your business activity and/or operate rideshare or taxi businesses, then you will need to be registered for GST purposes. Head to this article if you need more information about this.
If you’re not required to be GST registered, you do not need to lodge a BAS. In this situation, you will still need to complete an income tax return annually. If you have registered for GST by mistake, you can find out how to cancel your GST registration here.
A simple BAS explanation
At the conclusion of each period, your BAS lodgement is essentially reporting the amount of income you earned through your ABN, and your business expenses that you incurred in order to produce that income.
10% of the business income that you earn as a GST-registered sole trader represents an amount of GST that is owed to the ATO each period. However, you are also able to claim GST credits for business expenses that you paid GST on. These GST credits reduce the amount you actually need to pay the ATO in a given period.
Note: not all goods and services in Australia have GST applicable to them. Refer to a tax invoice to make sure the item had GST associated with it before reporting it on the BAS.
The outcome of the BAS lodgement can be any one of the following:
- A GST payable position (most common): This will occur when the GST collected on your business income exceeds the GST credits you have claimed on the BAS.
- A GST refund position (common for the first BAS, or BAS periods in which you incurred large expenses): This will occur when your BAS expenses exceed your business income.
- A nil outcome position: this will occur if you have no business income or expenses to report, or if your BAS income equals your expenses.
Note: if you are registered for GST you need to lodge a BAS, even if you didn’t earn any income in that period. Airtax undertakes this for free, and we call it a Nil BAS.
How Airtax makes lodging BAS a breeze
Forget worrying about the GST you have collected on your income, and GST credits. The Airtax BAS form will only ever ask you to report the actual amounts you earned as income, and the total amounts you spent on expenses. We have built in calculators that will work out the GST component of your income and expense amounts so you don’t have to do this yourself.
Once you have reported the total amount of income you earned in the relevant BAS period, we will ask you to record information about a number of expenses that are relevant to your business activity, including car expenses, phone and internet costs, to name a few. All you will need to do is report the total amount you spent on each expense category (for business + personal use) in the given period, alongside a percentage which describes the extent to which the expense amount was incurred to help you earn your business income.
Whilst you work on your BAS, you will be displayed a live estimate of your GST position, and will also be supported by expense comparison tools and warning messages that will help provide you with peace of mind.
We also provide connections to third party sites. For example, if you’re an Uber driver, check out this Help Centre article to learn how we make your BAS lodgement even easier. You can also check out an example Airtax BAS lodgement here.
How to lodge on Airtax
- Select ‘new BAS’ from your Airtax dashboard.
- Decide whether you would like to self-serve, or lodge your BAS with the support of a PwC Tax Specialist through our Business Assist service (recommended for first time users).
- Select your BAS reporting frequency, and reporting period. Most sole traders are required to lodge ‘quarterly’ BAS (every three months). For information about BAS reporting frequencies, click here.
- Enter the income made under your ABN. This should be the gross amount of income earned, before fees have been deducted.
- Enter your business expenses. The Airtax form allows you to group your expenses into logical categories. You can read more about doing this here.
- Review and confirm the BAS submission. We will show you a summary which explains the GST you owe to the ATO, or how much is refundable to you, before you submit. If you have selected an assisted service, then you will speak with a tax specialist before submission.
- We will lodge the BAS in 1-2 business days and send you a confirmation email once it has been finalised. You will receive a payment slip with instructions on how to pay the ATO any payable amounts, or in the case of a GST refund position, the ATO will pay this amount to your nominated bank account in 1-2 weeks.
Final tips and guidance
To help ensure you save time and optimise your lodgements, please consider the following:
- If you use a motor vehicle for business purposes, ensure you keep track of it’s usage through a logbook. You can read more about this and download your free Airtax logbook here
- Keep track of your business income and expense amounts throughout the BAS period. This will save you a lot of time when you come to prepare your submission at the end of each quarter. If you can, try to keep track of your expenses according to the categories listed on the Airtax BAS form. It’s completely free to start the form and check out the expenses we suggest.
- Make sure you are aware of the BAS deadlines so that you stay up-to-date and avoid incurring penalties from the ATO. We list these for you here. However, Airtax will send you reminders before your BAS is due as well.
- Make sure you have the right proof for claiming GST. For example, in order to claim a GST credit for a purchase, you must hold a tax invoice for purchases greater than $82.50 (inc. GST). For information on this, please click here.
If you feel like you need more detailed guidance as you complete your BAS, you can book a phone appointment to speak to a PwC tax specialist through our Business Assist service. This service involves a comprehensive phone call with one of our specialists at a time that suits you. Our ultimate goal of this phone service is to get you to a confidence level that will empower you to complete your Airtax BAS by yourself in the future.