How to lodge BAS: a step-by-step workflow for Australian bookkeepers

A BAS that is lodged on time and wrong is worse than one that is a few days late and right, because the wrong one has to be found and fixed later. The lodging itself is the last five minutes. This guide covers everything before it: finishing the period, reviewing the GST codes, knowing which labels the client has to complete, testing the totals, and then lodging, paying, and dealing with errors found afterwards. The GST rules themselves are in the Australian GST and BAS guide. Every date and limit below is the ATO’s, linked in the Sources section.

One point before the steps. Anyone who prepares or lodges BAS for a fee must be registered with the Tax Practitioners Board as a BAS agent or tax agent, or work under the supervision of someone who is ^[1] .

Step 1: finish the period

• Reconcile every bank and card account to the last day of the period.
• Enter every sales invoice issued in the period, and every purchase for which you hold a tax invoice.
• Run payroll to the end of the period, so the wages and withholding figures are final.
• Clear suspense. Uncoded items have no GST treatment and will be wrong on the BAS.
• Check the accounting basis. Cash and accrual GST reporting give different figures from the same transactions; confirm the software matches how the client is registered.

Step 2: review the GST coding

Run the GST detail report for the period and read it for exceptions.

• Group by tax code and look for items in the wrong group: bank fees with GST, a government charge with GST, wages with any code at all.
• Check purchases without a tax invoice. No tax invoice generally means no GST credit. The thresholds and invoice requirements are in the GST and BAS guide.
• Check suppliers with no ABN on the document.
• Separate capital purchases from non-capital, which matters for businesses on full reporting.
• Check mixed supplies: one invoice with taxable and GST-free lines needs each line coded on its own.
• Check private use on vehicles, phones, and home office costs.

The ATO publishes a Simpler BAS GST bookkeeping guide, developed with the Institute of Certified Bookkeepers and the BAS Agent Association Group, which lists common transactions with the tax code and BAS label for each ^[2] . It is the best reference to settle a coding argument.

Step 3: know the labels

Which labels the client completes depends on their GST turnover.

That is the ATO’s split ^[3] . At G1 you report either the GST-inclusive or the GST-exclusive total and indicate which ^[2] .

A BAS also carries other obligations where they apply:

• PAYG withholding: employers complete labels W1, W2, W3, W4, W5 and label 4, reporting wages paid and amounts withheld ^[4] .
• PAYG instalments towards the business’s own income tax.
• Other taxes, such as fuel tax credits, for businesses registered for them.

Step 4: test the totals

• 1A against G1. If every sale is taxable and G1 is GST-inclusive, 1A should be one-eleventh of G1. A lower figure needs explaining by GST-free or input-taxed sales.
• G1 against the profit and loss. Sales for the period should agree to income, allowing for GST and for the cash or accrual basis.
• 1B against purchases. Compare the ratio of GST credits to total purchases with the last four BAS. A jump is a question.
• W1 and W2 against payroll. Gross wages and tax withheld should agree to the pay runs in the period, and to what has been reported through Single Touch Payroll.
• The net amount against the ledger. After the BAS is prepared, the GST and withholding liability accounts should equal what the BAS says is payable.

Step 5: lodge

The ATO says most businesses that lodge their own BAS do so online, through one of three channels ^[5] :

• Online services for business, the ATO’s secure site for businesses.
• Online services for individuals and sole traders, reached through myGov.
• SBR-enabled software, which lodges directly from accounting or payroll software.

A registered tax or BAS agent can lodge, vary, and pay on the client’s behalf through their own electronic channel, and the client can still see the BAS in their own online services ^[5] . If there is nothing to report for the period, the BAS still has to be lodged, as a nil BAS.

Get the client’s approval of the figures in writing before you lodge. The BAS is their declaration.

Due dates

These are the ATO’s dates ^[6] . Three refinements:

• Monthly lodgers, which includes any business with GST turnover of $20 million or more, lodge and pay by the 21st of the following month ^[6] .
• Lodging online may give an extra two weeks to lodge and pay a quarterly BAS, and lodging through a registered agent may also give extra time. Neither applies to quarter 2, whose date already includes a one-month extension ^[6] .
• Weekends and public holidays move the due date to the next business day ^[6] .

All dates are collected in Australian tax deadlines.

Step 6: pay

The payment due date is shown on the BAS, and the liability needs to be paid in full and on time to avoid general interest charge ^[6] . Tell the client the amount and the date when you send the figures for approval, not after lodging. If the client cannot pay in full, lodge on time anyway; lodgment and payment are separate obligations, and a late lodgment adds a second problem.

Step 7: close the period

• Lock the period in the ledger so nothing can be backdated into a lodged quarter.
• File the working papers: the BAS as lodged, the GST detail report, the payroll reconciliation, and the client’s approval. See workpapers and audit trail.
• Note anything to pick up next quarter, such as tax invoices that arrived late.

Correcting a mistake after lodging

The ATO separates GST errors into two types, with different rules for fixing them on a later BAS ^[7] .

Credit errors are mistakes that led to reporting or paying too much GST, such as reporting a sale twice. They can be corrected on a later BAS lodged within the period of review, which runs for 4 years and one day from lodgment. No value limit applies.

Debit errors are mistakes that led to reporting or paying too little, such as claiming a GST credit twice. A debit error can be corrected on a later BAS only if all three conditions are met:

• It is within the time limit. For GST turnover under $20 million, the correction must be on a BAS lodged within 18 months of the due date of the BAS that contained the error. At $20 million or more, 12 months. The clock runs from when the error was made, not when it was found.
• The net sum of debit errors is within the value limit.
• It was not the result of recklessness or intentional disregard of a GST law.

Where the net sum exceeds the limit, the ATO allows correction up to the limit on the latest BAS and requires the original BAS to be revised for the rest ^[7] . Keep a note of each correction: what the error was, which period it came from, and where it was fixed.

If the BAS is late

The failure to lodge on time penalty is calculated at one penalty unit for every 28 days, or part of 28 days, that the statement is overdue, up to a maximum of five penalty units; that base amount applies to individuals and small withholders ^[8] . The ATO says it generally does not apply the penalty in isolated cases of late lodgment, and that it will warn by phone or in writing before applying one ^[8] .

There is also a safe harbour for clients of agents. A client is not liable for the penalty if they gave their registered agent all the relevant information in time to lodge by the due date, and the agent’s failure to lodge was not reckless or intentional ^[8] . That cuts both ways for a BAS agent: record when information arrived.

Where ExpenseFlow fits

Most of Step 2 is decided when a purchase is first coded. ExpenseFlow assigns GST treatment to each line of a bill or receipt at capture, using an Australian rule set that handles cases such as GST-free government charges and input-taxed bank fees. It flags what a reviewer would stop on: a missing or invalid tax code, a tax rate outside the expected range, and a document where a valid tax invoice is required. It extracts the supplier’s ABN from the document and shows it; it does not check the ABN against the register. Every item waits in a review queue until a person approves it, then syncs to Xero or QuickBooks Online.

ExpenseFlow does not prepare or lodge the BAS, and it does not make payments to the ATO. Steps 3 to 7 happen in the accounting software or through the agent’s lodgment channel.