If you’re unsure how to complete your Business Activity Statement (BAS), this guide walks you through it, line by line, so you can lodge it correctly and avoid ATO headaches.
Whether you’re a sole trader, small business owner, or managing your first quarterly lodgement, BAS doesn’t have to be a minefield. In this article, you’ll learn exactly what each label on your BAS means, how to fill it in, and how to avoid common mistakes. We’ll break it all down in plain English, no accounting jargon, no confusion.
What Is a BAS and Why It Matters
The Business Activity Statement (BAS) is a form submitted to the ATO to report and pay taxes such as GST, PAYG withholding, and PAYG instalments. Most businesses lodge it quarterly, though some may do it monthly or annually.
Getting your BAS right matters because errors can result in ATO penalties, cash flow disruptions, or even audits. That’s why a line-by-line guide, like this one, is so valuable.
Preparing to Complete Your BAS
1. Gather Your Records
Before you even open your BAS form, you’ll need:
- Sales records (invoices, receipts)
- Purchase records (supplier invoices, receipts)
- Payroll reports (if employing staff)
- Bank statements
- Accounting software reports (e.g. Xero, MYOB, QuickBooks)
2. Know Your BAS Period
Check the top of your BAS form or ATO portal to confirm the reporting period. Most commonly, it will be for a quarter: e.g. 1 Jan to 31 Mar.
3. Choose Cash or Accrual Accounting
- Cash basis: You report GST when you receive or pay money.
- Accrual basis: You report GST when you issue or receive invoices.
Make sure this matches your ATO registration and your accounting software settings.
Line-by-Line Breakdown of the BAS Form
G1: Total Sales
This is your total gross sales, including GST and export sales. It includes:
- Taxable sales
- GST-free sales
- Input-taxed sales
Tip: Even if you haven’t charged GST, all sales must be included here.
G2: Export Sales
Only include sales where goods were exported from Australia within 60 days. These are generally GST-free.
G3: Other GST-Free Sales
Includes:
- Basic food items
- Medical supplies
- Child care services
This field is for GST-free sales not already included at G2.
G10: Capital Purchases
Capital purchases are business assets (equipment, computers, vehicles) used over time.
- Include the GST-inclusive value here.
G11: Non-Capital Purchases
Everyday business expenses:
- Office supplies
- Rent
- Subscriptions
Again, report GST-inclusive values.
G12: Total Purchases
This field is auto-calculated (G10 + G11). Double-check for errors.
G13: Purchases for Private Use
If you’ve included any purchases partly used for personal use (e.g., mobile phones, fuel), you must declare the private-use portion here. This ensures you don’t over-claim GST credits.
G14: Input Taxed Purchases
Used when your business makes input-taxed supplies (e.g., residential rent, financial services). Purchases related to these activities usually don’t entitle you to GST credits.
1A: GST on Sales
This is where you report the total GST you’ve collected from customers on taxable sales.
1B: GST on Purchases
Here, you claim GST credits on business purchases. Ensure the items are:
- For business use
- Have a valid tax invoice (over $82.50 inc. GST)
4 PAYG Tax Withheld
If you have employees, this is where you report how much PAYG tax you’ve withheld from their wages during the period.
5A and 5B: Net Amounts
- 5A = What you owe (GST + PAYG Withheld + PAYG Instalments)
- 5B = What you’re claiming (GST credits)
If 5A > 5B, you pay the difference. If 5B > 5A, you may receive a refund.
Common Mistakes to Avoid
Double-Claiming GST
Ensure you don’t claim GST on:
- Private expenses
- Supplier invoices without valid ABNs or tax invoices
Wrong Accounting Basis
Lodging on a cash basis when you’ve reported on accrual (or vice versa) can throw off your entire BAS.
Forgetting PAYG Instalments
If you’ve received a PAYG instalment notice, you must report and pay it, even if you made a loss that quarter.
Tips to Simplify Your BAS
Use BAS-Enabled Accounting Software
Packages like Xero, QuickBooks, or MYOB automatically code GST, generate BAS summaries, and even lodge directly with the ATO.
Set Aside Tax Money Regularly
Open a separate bank account and transfer your GST/PAYG obligations weekly or monthly.
Review Before You Lodge
Run a BAS preview or ATO reconciliation report from your software. Look for anomalies like:
- Large jumps in GST
- Zero values where you usually have activity
Get Help if Needed
Don’t risk a penalty. A registered BAS agent or accountant can help, especially if you’re:
- Backlogged
- Newly registered
- Dealing with GST complexities (e.g. imports, partial private use)
Final Thoughts: BAS Doesn’t Have to Be Stressful
Completing your BAS is a routine part of doing business in Australia, and once you understand each section, it becomes far less intimidating. With accurate records, a methodical approach, and the right software (or professional help), your BAS lodgements can be quick, compliant, and even insightful for managing cash flow.
If in doubt, reach out to a registered BAS or tax agent. Getting it right now avoids trouble later, and gives you back time to focus on growing your business.
About The Author: Artur Osadchiy
Artur is a Certified Practising Accountant with over 30 years’ experience working as a trusted advisor to 600+ clients across Australia. Based in Melbourne, he started Tax Window with his wife Marina in 2009 and leads the firm’s tax and accounting team. In his free time, Artur enjoys watching the AFL (go Kangas!) and spending time with family.
Not sure where to start? Or already know what you need?
Book a meeting. Completely free, no preparation needed.
Talk through your situation with one of our senior accountants and get your questions answered. A quick, commitment free conversation, online or at our Bentleigh office.