What Is BAS and How Often Do Australian Small Businesses Need to Lodge It?

Introduction: What Is a BAS?

A Business Activity Statement (BAS) is a form the Australian Taxation Office (ATO) requires GST-registered businesses to lodge regularly, reporting GST collected and paid, PAYG withholding, and PAYG instalments in a single statement. The legislative basis sits in Division 388 of Schedule 1 to the Taxation Administration Act 1953.

The BAS is the primary way the ATO collects tax from businesses throughout the year. Instead of paying all your tax obligations in a single lump sum at the end of the financial year, the BAS system allows businesses to pay their taxes in regular instalments based on their actual business activity. This helps businesses manage their cash flow more effectively and ensures the ATO receives a steady stream of revenue throughout the year.

Who Needs to Lodge a BAS?

You need to lodge a BAS if you are registered for GST — mandatory once turnover reaches $75,000 annually ($150,000 for non-profits), or voluntary below that threshold. Once you are registered for GST, you are required to lodge a BAS regardless of whether you have any business activity or tax liability in a particular period.

Even if your business is not registered for GST, you may still need to lodge a BAS if you have other tax obligations such as PAYG withholding (deducting tax from employee wages) or PAYG instalments (prepaying your own income tax). The ATO will notify you if you are required to lodge a BAS based on your specific tax obligations.

How Often Do You Need to Lodge?

The frequency of your BAS lodgements depends on your business's turnover and tax obligations. The ATO assigns businesses to one of three lodgement cycles: quarterly, monthly, or annually. Your cycle is determined by your GST turnover and your PAYG withholding obligations.

Quarterly (most common): For businesses with GST turnover under $20 million, BAS is due on the 28th of the month following the end of each quarter. This means the July-September quarter is due by October 28, the October-December quarter by January 28 (with a holiday extension to February 28), the January-March quarter by April 28, and the April-June quarter by July 28.

Monthly: Mandatory if your GST turnover is $20 million or more, or if your PAYG withholding exceeds $25,000 per year. Monthly BAS is due on the 21st of the month following the reporting period. For example, the January BAS is due by February 21.

Annual: Available for voluntary GST registrants with turnover under $75,000. Annual BAS is generally due by October 31 following the end of the financial year. This option simplifies compliance for very small businesses, though many still choose to lodge quarterly or monthly to better manage their cash flow.

2026 Quarterly Due Dates

For businesses on a quarterly lodgement cycle, the due dates for 2026 are as follows: Quarter 2 (October-December 2025) is due by 28 February 2026 (with a holiday extension for the Christmas/New Year period). Quarter 3 (January-March 2026) is due by 28 April 2026. Quarter 4 (April-June 2026) is due by 28 July 2026. Quarter 1 of the next financial year (July-September 2026) is due by 28 October 2026.

Using a registered BAS agent generally adds a further four weeks to your due date (e.g., Q3 extends to 26 May) if you are registered with them before the original due date. This extension can be valuable for businesses that need additional time to prepare their BAS accurately, but it is important to note that the extension applies only if you are registered with the agent before the original due date—not after.

Late Penalties: The Real Numbers

The Failure to Lodge (FTL) penalty uses penalty units - $330 per unit as of November 2024, charged for every 28 days (or part) overdue, capped at 5 units ($1,650) for small entities. Medium entities (turnover $1M-$20M) face double the penalty rate, while large entities (turnover $20M+) face 5 times the standard rate.

For example, if a small business lodges its BAS 30 days late, it faces a penalty of 2 penalty units ($660) because the first 28 days constitute one period, and the additional 2 days constitute a second period (part of 28 days counts as a full period). If the same business lodges 60 days late, it faces 3 penalty units ($990), and so on up to the maximum of 5 units ($1,650).

In addition to the FTL penalty, the ATO also charges interest on any unpaid tax amounts. The General Interest Charge (GIC) is calculated daily on outstanding balances and is compounded. As of 2026, the GIC rate is approximately 11.2% per annum, which can add significantly to the total amount owed if you are late in paying your BAS liability.

Nil Activity Still Requires Lodgement

A nil BAS must still be lodged even with zero business activity that quarter—the obligation exists regardless of what there is to report. Many business owners mistakenly believe that if they have no sales, no wages, and no tax to pay, they do not need to lodge a BAS. This is incorrect. The ATO requires every GST-registered business to lodge a BAS for every reporting period, even if all figures are zero.

Failure to lodge a nil BAS attracts the same penalties as failing to lodge a BAS with tax payable. The ATO does not differentiate between nil and non-nil BAS when applying failure-to-lodge penalties. Therefore, it is essential to lodge your BAS on time even if you have no business activity during the period.

What You Need to Claim GST Credits

To claim input tax credits (GST credits), you need a valid tax invoice from your supplier, the purchase must relate to your business, and the supplier must be GST-registered. The ATO can request documentation during reviews or audits, so it is essential to keep all tax invoices and receipts organized and accessible for at least five years.

A valid tax invoice must include the supplier's ABN, the date of issue, a description of the goods or services, the GST amount (or a statement that the total price includes GST), and the total price. For purchases under $1,000, the tax invoice must also include the supplier's name and ABN. For purchases over $1,000, additional details such as the buyer's identity and the quantity of goods are also required.

Common BAS Mistakes to Avoid

One of the most common BAS mistakes is confusing GST collected with GST paid. GST collected is the GST you charge your customers on taxable sales, while GST paid is the GST you pay your suppliers on business purchases. Your BAS liability is calculated as GST collected minus GST paid. If you have paid more GST than you have collected, you are entitled to a refund from the ATO.

Another common mistake is failing to include all taxable sales, particularly cash transactions. The ATO uses data matching and industry benchmarks to identify businesses that may be underreporting their income. If your reported income is significantly below the industry average, the ATO may initiate a review or audit.

Many businesses also make errors when claiming GST credits for private or non-business expenses. You can only claim GST credits for purchases that are directly related to your business activities. Personal expenses, even if paid from your business account, are not eligible for GST credits. Keeping a separate business bank account and credit card can help you avoid this mistake.

Conclusion: Staying on Top of Your BAS Obligations

Lodging your BAS accurately and on time is one of the most important compliance obligations for Australian businesses. Understanding what needs to be reported, when it needs to be lodged, and the consequences of late lodgement can help you avoid penalties and keep your business on track. Even if you have no business activity in a particular period, you must still lodge a nil BAS to remain compliant.

If you find BAS lodgement confusing or time-consuming, consider engaging a registered BAS agent or accountant. A professional can help you prepare accurate BAS returns, claim all eligible credits, and ensure you meet all deadlines. Many businesses find that the cost of professional assistance is far less than the cost of penalties and interest from making errors or lodging late.

If you would like help with BAS lodgement or catching up on overdue statements, our team at CA-Sir works with Australian small businesses to keep compliance simple and on time. Contact us today to learn how we can help you manage your BAS obligations and focus on growing your business.