BAS for Tradies: A Complete Plain-English Guide to Lodging Your Business Activity Statement

and does not constitute financial, tax or legal advice. Always consult a

BAS -- the Business Activity Statement -- is something every

GST-registered tradie in Australia has to deal with, either monthly or

quarterly. For many tradies, especially those new to running their own

business, BAS is a source of anxiety: what exactly does it cover, how do

you calculate the figures, and what happens if you get it wrong?

This guide cuts through the jargon and gives you a clear, practical

understanding of what BAS is, what it covers, how to prepare it, and how

to avoid the most common mistakes.

What Is a BAS?

A Business Activity Statement is a form lodged with the ATO that

summarises your business's tax obligations and entitlements for a

specific period. For most tradies, a BAS will include:

• GST collected from clients (the 10% you charged on top of your

prices)

• GST credits on your business purchases (the 10% GST you paid to

suppliers and other businesses)

• PAYG withholding -- the tax you've withheld from employee wages (if

you have employees)

• PAYG instalments -- periodic prepayments of your own income tax based

on the previous year's income (once you're established)

The net BAS figure is either an amount you owe the ATO or an amount the

ATO owes you, depending on the GST collected versus GST credits balance.

When Do You Need to Lodge?

If you're registered for GST, you must lodge a BAS. The frequency is:

• Quarterly: Most small trade businesses. Due dates are 28 October, 28

February, 28 April, and 28 July, covering the quarters ending

September, December, March and June respectively.

• Monthly: Optional for businesses that prefer more frequent cash flow

clarity, or where your input tax credits regularly exceed your GST

collected (for example, if you have large tax-deductible purchases).

If you lodge through a registered BAS agent or accountant, you may get

an extended lodgement deadline -- often an additional month beyond the

standard due date. This is one of the practical benefits of using a BAS

agent.

Calculating Your GST Collected

GST collected is the 10% GST you included on invoices to your clients

during the quarter. If you charged a client $1,100 for a job ($1,000

plus $100 GST), the $100 is GST collected and needs to be reported on

your BAS.

If you use accounting software like Xero or MYOB and you've been coding

invoices correctly with GST, the software calculates this automatically.

The BAS report in your software will show the exact figure.

If you're on a cash accounting basis (the most common approach for small

trade businesses), you only report GST on invoices you've actually

received payment for during the quarter -- not invoices you've sent but

haven't been paid yet. If you're on an accruals basis, you report GST

when the invoice is issued regardless of payment.

Calculating Your GST Credits (Input Tax Credits)

GST credits are the 10% GST component of purchases you've made for

business purposes during the quarter. When you buy materials, fuel,

tools, or any other business expense from a GST-registered supplier, you

can claim back the GST as a credit on your BAS.

To claim a GST credit, you need a valid tax invoice from the supplier --

for purchases over $82.50, the tax invoice must include the supplier's

ABN, a description of the goods or services, the date, the total amount,

and a clear indication that GST is included. Your receipt from Bunnings,

Reece, or any registered trade supplier will include all of this.

You cannot claim GST on purchases from non-registered sellers (private

sale tools, for example), purchases that aren't for business use, or

items specifically excluded from GST credit (like financial services or

residential rent).

The Net GST Position

The net amount reported on your BAS for GST is: GST collected minus GST

credits. If you collected $8,000 in GST from clients and paid $2,000 in

GST on business purchases, your net GST liability for the quarter is

$6,000 -- payable to the ATO by the due date.

If your input tax credits exceed your GST collected (unusual but

possible during periods of heavy equipment or material purchasing),

you're in a refund position -- the ATO owes you money for that quarter.

PAYG Withholding on Your BAS

If you have employees or apprentices, the PAYG withholding you've

deducted from their wages during the quarter is also reported on the

BAS. This is the tax you've held on behalf of your employees and now

need to remit to the ATO. The figure comes directly from your payroll

records.

Small withholders (generally those with less than $25,000 in annual PAYG

withholding) report and pay quarterly on the BAS. Medium withholders

($25,000-$1 million annually) pay monthly. Check your category with your

accountant.

PAYG Instalments

Once you've been in business for a full year and your income tax bill

exceeds a threshold, the ATO will typically put you on PAYG instalments

-- quarterly prepayments of your estimated income tax for the current

year, based on last year's income. These appear on your quarterly BAS as

an additional payment.

PAYG instalments aren't a new or additional tax -- they're a prepayment

of the income tax you'll owe at year end. They smooth out the tax

payment rather than leaving you with one large bill on 31 October. If

your income in the current year is significantly different from the

previous year, you can vary your PAYG instalment amount -- speak to your

accountant about when and how to do this.

Lodging Your BAS

Options for lodging your BAS include:

• Through Xero or MYOB directly to the ATO: If you use accounting

software with an ATO integration, you can lodge directly from the

software after reviewing the figures.

• Through the ATO's Business Portal: Log in with your myGovID and

lodge online.

• Through a registered BAS agent or accountant: They review, prepare

and lodge on your behalf. You get extended deadlines and

professional review.

Always keep a copy of each lodged BAS and the payment confirmation. BAS

records need to be kept for five years.

Avoiding Late Lodgement

Late BAS lodgement attracts a Failure to Lodge (FTL) penalty of $313 for

the first 28 days late, increasing with each additional 28-day period.

Interest charges also apply to unpaid amounts. These are avoidable costs

-- set a reminder for each BAS due date and give yourself a week before

the due date to prepare.

If you genuinely can't pay the full amount by the due date, still lodge

on time to avoid the FTL penalty, and contact the ATO to arrange a

payment plan. The ATO charges interest on payment plans but the interest

rate (currently around 8-9% per annum) is lower than the combined FTL

penalty and interest you'd face by not lodging at all.