What is BAS?
The ATO requires businesses in Australia to file the Business Activity Statement (BAS), which is a key compliance requirement for businesses registered with the ATO.
BAS is a form that businesses have to submit, which will help them report and pay their
- Goods and Services Tax (GST)
- Pay As You Go (PAYG) instalments
- PAYG withholding tax (amounts withheld from employees or other payees)
- Other applicable taxes, such as Fringe Benefits Tax (FBT) instalments, wine equalisation tax (WET), or luxury car tax (LCT), if relevant
Importance of BAS compliance for businesses
Businesses, especially small ones, often have to handle all tasks themselves due to limited capacity.
The ATO has said that businesses that are having difficulty filing BAS on time need to contact them before the due date. It is the responsibility of the business owner to lodge BAS by themselves or through a registered tax agent on time.
What is the base penalty, and how does it differ based on withholding capacity?
If the BAS lodgment is not done on time, then businesses will receive a failure to lodge (FTL) penalty.
The base penalty unit amount is $330 for infringements on or after 7 November 2024, and is calculated at the rate of one penalty unit for every 28 days that the document is overdue.
The base penalty is multiplied depending on the business’s withholding capacity, which is determined by the amount of PAYG withholding or turnover.
Withholding Capacity | Definition | Penalty Applied |
Small entity | Small or non‑withholder / PAYG withholding ≤ $25,000 | 1 × base penalty |
Medium entity | PAYG withholding $25,001 – $1 million | 2 × base penalty |
Large entity | PAYG withholding > $1 million | 5 × base penalty |
Significant Global Entity (SGE) | Multinational entities meeting SGE criteria | 500 × base penalty |
Example (One BAS lodged over 28 days late)
- Small entity: 1 × $330 = $330
- Medium entity: 2 × $330 = $660
- Large entity: 5 × $330 = $1,650
Maximum penalty (after 5 periods):
- Small entity: $1,650
- Medium entity: $3,300
- Large entity: $8,250
Penalties apply even if no tax is payable. The penalty clock stops as soon as the BAS is lodged. The ATO may remit penalties if there are valid reasons (e.g., serious illness, natural disaster)
What falls under BAS?
- GST collected and credits claimed
- PAYG withholding
- PAYG instalments
- Fringe Benefit Tax (FBT) instalments (if applicable)
- Other taxes such as Fringe Benefits Tax (FBT) instalments, Wine Equalisation Tax (WET), Luxury Car Tax (LCT), Fuel tax credits, Deficit tax or other specific ATO liabilities
How frequently does BAS need to be paid?
BAS needs to be filed quarterly, monthly, or annually, depending on a business’s annual turnover.
For businesses with a turnover of less than AUD 20 million, the following are the due dates.
The BAS needs to be filed quarterly.
Q1 : (July-September):28th October
Q2 : (October-December):28th February
Q3 : (January-March): 28th April
Q4 : (April-June): 28th July
For businesses with a turnover of AUD 20 million or more
The BAS should be filed monthly, with the 21st of the following month as the deadline.
For small businesses that voluntarily register for GST, BAS returns must be filed annually, with the deadline on 31st October.
Mistakes that can impact BAS filing
Common mistakes that may occur while lodging a Business Activity Statement (BAS) include:
- Incorrect GST reporting – A business must report both the GST collected on sales and the GST paid on business purchases. Errors can occur when GST is reported incorrectly or when ineligible GST credits are claimed.
- PAYG withholding reconciliation errors – Mistakes can arise due to mismatches between BAS figures and payroll reports, resulting in incorrect PAYG withholding amounts being reported.
- Missing lodgment or payment deadlines – Failing to lodge the BAS or make payments on time can lead to penalties and interest charges.
- Reconciliation errors in records – Differences between bank statements, sales records, and accounting data can cause inaccurate BAS reporting if not reconciled properly.
Want to simplify BAS filing?
As a business owner, indulging yourself in filling out forms and managing tax sheets will divert you from growing your business and focusing on providing the best service or product to your clients.
Getting the much-needed support from an outsourcing provider helps you to reduce complexity, add structure to BAS filing, build in quality checks, avoid penalties, and stay compliant with the ATO.
If you’re looking to take the burden of compliance off your shoulders, book a call with us.
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