When starting out as a sole trader, there are a lot of things you need to be across: how to promote your business, how to price your services, and how to track and manage your projects, for example.
Then, there’s the issue of managing your tax obligations.
Alongside income tax, the Medicare levy, and your student loan repayments, you’re also in charge of deciding if and when to register for GST. And if you do register for GST, you’ll also need to start lodging Business Activity Statements (BAS) with the ATO.
But hang on, we’re getting ahead of ourselves!
Let’s take a look at what a BAS is, how to lodge it and why you might need to lodge one. Spoiler alert: they might not actually apply to you.
What is a BAS?
Business Activity Statements are how you report and pay GST collected, PAYG instalments, and other relevant taxes.
It’s basically a form you fill in and lodge with the ATO, alongside payment of what you owe them. Pretty straightforward, nothing to panic about. Plus, depending on your situation, you may need to lodge a BAS multiple times a year – you’ll get used to it in no time!
If you’re unsure about it all, the ATO has some excellent guides to help sole traders get their heads around how and when to lodge.
Who needs to lodge a BAS?
The tl;dr is that you’re required to lodge a BAS if you’re registered for GST.
But GST information isn’t the only thing you’d record in your BAS – you’d also include PAYG instalment and withholding payments, and a few other niche things like fringe benefit tax, luxury car tax, wine equalisation tax (only if it’s relevant for you). You know, the usual.
BAS only come into play if you’re GST registered specifically. If any of these other things apply to you, but you’re not GST registered, you’d lodge an Instalment Activity Statement instead.
📖 Lost in all the lodgements? We have a guide that walks you through everything you need to lodge with the ATO.
When do you need to lodge a BAS?
Great question! The answer: it depends on your situation.
BAS can be lodged monthly, quarterly, or annually – but there are some limitations.
- If you earn less than $75k in annual self-employed income, and are voluntarily registered for GST, you can choose to lodge annually.
- If you’re over the $75k threshold, and make less than $20 million (imagine!), you must lodge at least quarterly.
- If you make over $20 million, you’re required to lodge monthly.
For those lodging annually, you’d submit your BAS once a year, usually before the 31st of October.
For those lodging quarterly, your BAS is due on the 28th day of the month following the end of the quarter. Eg. for a quarter ending March 31st, your BAS is due on the 28th of April.
For those lodging monthly, your BAS is due within 21 days after the end of the month. Eg. March’s BAS is due by the 21st of April.
How to lodge your BAS
Ah yes, the final piece of the puzzle – actually lodging your BAS with the ATO.
It’s a simple process, although it does require a bit of admin. Mostly because you’ll need to keep meticulous records of your invoices and expenses.
To complete the BAS form, you’ll need:
- Your details, including your ABN
- The GST accounting method you’re using
- The total amount of sales for the period
- The total amount of GST collected on your sales
- The total amount of GST paid on business expenses
- The amount of PAYG tax due (if applicable)
You can lodge a BAS in three different ways:
- Online, through the myGov portal
- Through a tax agent (like Hnry!) or BAS agent
- By mail (if you pick this option, that’s kind of impressive, but maybe not in a good way)
Better yet, if you’re using Hnry, you don’t even need to think about any of this – we automatically do it for you.
Hang on, what is GST?
Bit lost? Here’s a quick refresher:
GST is a 10% flat-rate consumption tax levied on almost all goods and services.
What this basically means is that if you go shopping at, say, a large green hardware store, you’ll likely have to pay an additional 10% GST for every item you purchase. There are exceptions for GST – for example, certain foods, some personal items, healthcare and some household essentials.
If you’re registered for GST, you must charge an additional 10% on top of your usual prices, which you’ll then need to forward on to the ATO (as part of your BAS!). Remember, GST is tax your client owes to the government – you’re just the middleman. Don’t pay it out of your own pocket!
Finally, if you pay more in GST when purchasing business expenses than you collect from your clients, you may be eligible for a refund. This is different from the tax deductions you can claim for your business, which is a whole other thing.
If your BAS lodgement period is quarterly, every three months at the end of March, June, September and December, the ATO will automatically send you a BAS form to complete – either through the post or if you have your MyGov account linked to the ATO, you can find this online. You have until the 28th of the following month to then lodge the form and make any payment owing to the ATO.
The GST portion of your BAS is the GST (10% on top of your invoices) you charged clients minus any GST you paid in the course of your business expenditure.
When do I need to register for GST?
Well, technically, you can register for GST at any point (although it should really be a conscious business decision, and not based on vibes). But you’re only required to register for GST once your self-employed income is set to exceed $75,000 in any given 12 month period.
It doesn’t matter if the projected 12 months crosses two different financial years – as soon as it looks like you’ll make above this threshold in the next 12 months (well done you!), you’ll need to register for and start charging GST.
(And if you’re already over this threshold, you need to register for GST, like, yesterday.)
There are also a few other situations in which you’re required to register for GST, even if you’re below the $75k threshold. For example, if your business is a taxi or limousine service, including ride-sourcing, or if you want to claim fuel tax credits for your business.
What is PAYG?
Pay As You Go (PAYG) tax is most commonly applied to salaried workers – it’s the system by which employers deduct tax from their employees.
But sole traders actually have a similar system available to them, called PAYG instalments. It’s where you pay your projected income tax bill in instalments throughout the financial year.
The ATO will require you to make PAYG instalments if you have:
- Instalment income from the last financial year totalling $4,000 or more
- Tax owing of more than $1,000 from the previous financial year, and
- An estimated tax bill of $500 or more for the current financial year
💡 Note: when we say “estimated tax bill”, we mean estimated by the ATO, not you! You can’t estimate a tax bill of $0 and then just not pay tax. That’s not how anything works.
If you’re quarterly GST-registered, you’ll pay your PAYG instalments quarterly as part of your BAS lodgement. If you’re not GST-registered, you’ll still need to pay your PAYG instalments quarterly, but you’ll use an IAS instead.
📖 For more information on how PAYG instalments work, including how to vary the amount you’ll need to pay if you reckon you’ll make more or less this year than last year, check out our guide to PAYG instalments.
BAS due dates 2024/25
If you lodge quarterly (the most common schedule), put these dates in your calendar:
| Quarter | Months | Due date |
|---|---|---|
| 1 | July, August, September | 28th October |
| 2 | October, November, December | 28th February |
| 3 | January, February, March | 28th April |
| 4 | April, May, June | 28th July |
Let Hnry do your BAS
Hnry is a registered tax agent, meaning we can sort your BAS for you. You wouldn’t even have to think about it.
But it’s actually better than that – for just 1% +GST of your self-employed income, capped at $1,500 +GST a year, Hnry will calculate and pay all your taxes, levies and whatnot for you, including:
We also lodge your income tax returns for you, at no added cost. AND we handle all your financial admin, like:
- claiming expenses,
- sending quotes and invoices,
- and chasing up late-paying customers (politely of course).
Basically, you don’t have to go at it alone anymore. Hnry was designed by sole traders, for sole traders. We know exactly what you need to get the job done.
Join Hnry today!
Share on: