Quarterly GST filing for Australian small businesses

GST in plain English

GST in Australia is a 10% consumption tax. Almost everything sold in Australia attracts GST (some items are GST-free, e.g., basic food, education, some health services). If you're a registered business, you charge GST on your sales and you can claim back the GST you paid on business inputs. The net of the two is what you remit to the ATO each quarter.

The mechanism is a Business Activity Statement, the BAS. Despite the intimidating name, the BAS is a single form (literally one screen in the ATO portal) with a handful of boxes. The hard part is not the form; it's making sure the numbers feeding the form are right.

The four boxes that actually matter

If your business is a typical Australian small business with no employees and no fancy structure, four boxes of the BAS matter:

G1 Total sales: total income including GST you charged. If you sold $11,000 worth of services this quarter (GST-inclusive), this box is $11,000.

1A GST on sales: the GST portion of G1, in the most common scenario this is G1 ÷ 11. Continuing the example, $1,000.

G11 Total purchases: total business inputs that have GST in them, GST-inclusive. If you spent $5,500 GST-inclusive on supplies and operating costs, this is $5,500.

1B GST on purchases: the GST you can claim back, in the simple case G11 ÷ 11. Continuing, $500.

The net amount owed is 1A − 1B. In the example, $500 to remit.

There are other boxes (PAYG withholding if you have employees, PAYG instalments if you're prepaying income tax, fuel tax credits for certain industries, etc.). But for a basic services business, the four above carry the work.

What "reconciled" means before BAS time

The four numbers above are summary numbers. They come from the actual transactions in your accounting system. Each sale invoice contributes to G1 and 1A. Each expense receipt with GST contributes to G11 and 1B. If a transaction is missing, the summary is wrong.

This is why "reconciliation" is the magic word. Before you lodge, every bank account is matched to recorded transactions, every transaction has a category and a GST treatment, and every receipt or invoice is on file backing it up.

In practice, the failure mode is invariably the same: a receipt got missed. The taxi to the client meeting in February, the conference WiFi in March, the SaaS subscription that auto-renewed in May. Each one is small, each one means you under-claimed the GST refundable.

The four-week rhythm

The cleanest BAS process treats each quarter as a four-week rhythm rather than a one-day scramble.

Week 1 of each new quarter, glance at the previous quarter's numbers. Did anything look weird? A category that ballooned, a vendor you didn't recognize, a sale you forgot you'd made?

Weeks 2–4 of each new month, capture receipts as they arrive. Forward, photograph, drop into a folder, whatever your system is. TidyBooks customers do nothing here; the inbox and cloud-drive scanning handles it.

Week 1 of the lodgement month (July, October, February, April), reconcile. Bank accounts matched, categories assigned, GST treatment confirmed. If a transaction is uncertain, flag it for a quick question to your accountant.

Lodgement day. The numbers are correct, the form takes five minutes, payment is set up in the bank for the due date.

Common mistakes

Claiming GST on GST-free purchases. Basic food, some health services, some education services are GST-free; if a receipt has $0 GST, you can't claim a credit just because the total is $11.

Mixing up tax-inclusive and tax-exclusive amounts. If your supplier's invoice says $100 + GST, the GST is $10 and the total is $110. If their invoice says $110 inc GST, the GST is $10 and the net is $100. Get the orientation right or your numbers will be off.

Forgetting capital purchases. Buy a new laptop for $2,200 (GST-inclusive)? The full $200 GST is claimable on this BAS (assuming it's used 100% for business). Don't depreciate it for GST purposes; depreciation is an income-tax concept, not GST.

Bank fees with GST. Most bank fees are GST-free, but some merchant fees include GST. Read the bank statement carefully.

When to claim, when to wait

GST registration confers the right to claim input credits, but only on purchases made for the business and only when you have the tax invoice. If a receipt is missing or doesn't qualify as a tax invoice (e.g., it's just a credit card slip with no supplier ABN), you cannot claim. You can ask the supplier for a tax invoice up to four years later; some forgiving accounting platforms let you flag this.

What TidyBooks does for GST

Every receipt or invoice we capture has the GST broken out. The summary view shows GST collected (from sales we know about) and GST paid (from receipts we've captured). At BAS time, you have the numbers ready. The actual lodgement still happens in Xero, MYOB, QuickBooks, or directly via the ATO portal, but the inputs are clean. That's usually the difference between a 30-minute BAS and a half-day BAS.

Frequently asked questions

Do I have to register for GST?

You must register if your business turnover is or will be $75,000 or more in any 12-month period ($150,000 for non-profits). Below that registration is optional. Ride-share and taxi drivers must register regardless of turnover.

How often do I file?

Most small businesses file quarterly. The lodgement and payment deadlines are 28 July, 28 October, 28 February, and 28 April. Larger businesses (over $20M turnover) file monthly. Very small voluntary registrants can elect annual.

What if I lodge late?

The ATO charges a Failure To Lodge penalty plus general interest on outstanding amounts. The penalty is calculated per 28-day period of lateness, so being a day late is much cheaper than being a month late. Set reminders.

Cash or accrual for GST?

Cash basis accounts for GST when payment is made or received; accrual accounts when invoiced or paid. Cash is simpler and used by most very small businesses. Accrual is required above certain thresholds and gives a more accurate picture of performance. This template works for either; what matters is which side of each line goes in.

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Prageeth Silva is co-founder of TidyBooks. He's spent a decade close to small-business bookkeeping in Australia.