Every quarter the same question lands on the desk of a small business owner: how much do I owe the ATO on this BAS? The answer is a handful of simple sums. The hard part is knowing which figure belongs in which box and which period it falls into.
This guide shows how to calculate a business activity statement for the 2025-26 and 2026-27 years: GST on sales, GST credits, cash versus accruals reporting, the G1, 1A, 1B, W1, W2 and T7 labels, Simpler BAS, PAYG instalments and due dates. Every rule and date was checked against ATO guidance on GST reporting and related ATO pages in October 2026.
It is written for sole traders, partnerships and small companies that prepare their own BAS, or want to check what their bookkeeper has done. If you want the bigger picture on what an activity statement is first, read our activity statement guide.
Key takeaways
- GST on a taxable sale is one-eleventh of the GST-inclusive price, so 1A is taxable sales divided by 11.
- Businesses with GST turnover under $10 million use Simpler BAS by default: only G1, 1A and 1B for GST.
- Cash basis GST is available if aggregated turnover is under $10 million; otherwise you report on accruals (invoice basis).
- You need a valid tax invoice to claim a GST credit on purchases over $82.50, and credits are subject to a 4-year time limit.
- Quarterly BAS is due 28 October, 28 February, 28 April and 28 July.
- Your amount owing is net GST (1A minus 1B) plus PAYG withheld (W2) plus any PAYG instalment (T7 or T11).
BAS labels at a glance
| Label | What it shows | How to work it out |
|---|---|---|
| G1 Total sales | All sales for the period: taxable, GST-free and input-taxed | Total from your sales records; tick whether the figure includes GST |
| 1A GST on sales | GST you charged customers | Taxable sales including GST divided by 11 |
| 1B GST on purchases | GST credits you can claim | Creditable purchases including GST divided by 11 |
| W1 Total salary and wages | Gross payments you withhold tax from | Not needed if you report through Single Touch Payroll |
| W2 Amounts withheld | Tax withheld from the payments at W1 | From your payroll reports |
| T7 Instalment amount | PAYG instalment the ATO worked out for you | Pay as shown, or vary using T8, T9 and T4 |
Source: ATO GST reporting methods, ATO PAYG withholding on the BAS, ATO PAYG instalments instructions, checked 7 October 2026.
What does a BAS actually calculate?
A BAS brings several tax obligations together in one statement. For most small businesses there are three moving parts:
- GST: the GST you collected on sales (1A) less the GST credits on your business purchases (1B).
- PAYG withholding: the tax you withheld from wages and certain other payments (W2, plus W4 and W3 if they apply), totalled at W5 and copied to label 4.
- PAYG instalments: prepayments of income tax on business and investment income, reported at 5A.
Add the amounts you owe, subtract any credits, and the result is what you pay or what the ATO refunds. If you are not yet registered for GST, our GST registration service and the guide to GST registration explain when you have to register.
How do you calculate GST on sales and GST credits?
Australian GST is 10% of the GST-exclusive price, which means it is one-eleventh of the GST-inclusive price. The ATO calculation worksheet tells you to divide your total taxable sales by 11 and transfer that figure to 1A, and to divide your purchases subject to GST by 11 and transfer that figure to 1B. Report whole dollars and round down.
G1 includes every sale: taxable, GST-free and input-taxed. Only the taxable portion goes through the divide-by-11 step. A café selling dine-in meals and packets of GST-free food reports both at G1, but only the dine-in sales generate GST at 1A.
When can you claim a GST credit at 1B?
- You use the purchase solely or partly in your business, and it does not relate to input-taxed supplies.
- The price included GST.
- You have paid or are liable to pay for it.
- You hold a valid tax invoice for purchases over $82.50 including GST. For smaller purchases a receipt or docket is enough.
Credits are subject to a 4-year time limit, per the ATO GST credit rules. Software such as Xero, QuickBooks or MYOB does the one-eleventh split for you, but only if each transaction carries the right GST code.
Cash or accruals: which period does each amount belong in?
The accounting method you use for GST decides which BAS a sale or purchase lands in. Businesses with aggregated turnover under $10 million can choose the cash basis, according to the ATO accounting method guidance.
| Method | Who can use it | Sales reported | GST credits claimed |
|---|---|---|---|
| Cash basis | Aggregated turnover under $10 million, or you account for income tax on a cash basis | In the period you receive payment | In the period you pay |
| Non-cash (accruals) | Any business; required for most larger businesses | In the period you issue the invoice or receive any payment, whichever is first | In the period you receive the tax invoice or make any payment, whichever is first |
On the cash basis, an invoice issued on 25 September but paid on 3 October goes in the December quarter. On accruals it goes in the September quarter.
Simpler BAS or full reporting?
If your GST turnover is less than $10 million, Simpler BAS is the default. You report G1, 1A and 1B and skip the GST calculation worksheet. You no longer report export sales (G2), other GST-free sales (G3), capital purchases (G10) or non-capital purchases (G11).
If your GST turnover is $10 million or more, you must use the full reporting method and complete all seven GST fields.
How do the PAYG withholding labels W1 and W2 work?
W1 is the gross amount of salary, wages and other payments you usually withhold from. W2 is the tax you withheld from those payments. W4 covers amounts withheld from suppliers who did not quote an ABN. W5 is the total of W2, W4 and W3, and it is copied to label 4.
Under the ATO withholding instructions, employers reporting through Single Touch Payroll no longer need to report W1, but W2 still has to be completed. Our payroll services team reconciles STP figures before each BAS so the numbers match.
How are PAYG instalments calculated?
If you earn business or investment income, the ATO may put you into PAYG instalments. Your activity statement gives you one of two options:
- Instalment amount (T7): pay the amount the ATO worked out. If your income has changed, enter an estimate of your tax for the year at T8, a varied amount at T9 and a reason code at T4.
- Instalment rate (T1 x T2): enter your gross business and investment income excluding GST at T1, multiply it by the rate at T2 and report the result at T11.
Whichever option you use, the instalment flows to 5A. Instalments are credited against your income tax when you lodge your return.
When is the BAS due and what if you are late?
| Quarter | Period | Due date |
|---|---|---|
| Q1 | July to September | 28 October |
| Q2 | October to December | 28 February |
| Q3 | January to March | 28 April |
| Q4 | April to June | 28 July |
Monthly lodgers pay by the 21st day of the month after the period ends. Lodging online may give an extra two weeks for most quarters, but not the December quarter. Annual GST returns for voluntarily registered businesses are due 31 October. Registered agents may have later dates. See the ATO BAS due dates and our tax due dates guide.
Late lodgment can attract a failure to lodge penalty of one penalty unit ($364 from 1 July 2026) for each 28 days late, up to five units for small businesses. Unpaid amounts attract general interest charge, which is 11.51% a year for October to December 2026. The ATO penalties page and our guide to ATO overdue interest have more detail.
Worked example: a quarterly BAS for a small trades business
A plumbing business on the cash basis and Simpler BAS receives $49,500 of taxable sales (including GST) and $5,500 of GST-free sales in the September quarter. It pays $16,500 of business purchases that include GST, $24,000 of gross wages, and has a PAYG instalment of $1,800 at T7.
- G1 total sales: $49,500 + $5,500 = $55,000
- 1A GST on sales: $49,500 / 11 = $4,500
- 1B GST on purchases: $16,500 / 11 = $1,500
- Net GST: $4,500 – $1,500 = $3,000
- W1 wages $24,000 (not required if reported through STP); W2 tax withheld $4,320
- 5A PAYG instalment: $1,800
Total payable: $3,000 + $4,320 + $1,800 = $9,120, due 28 October (or later if lodged through a registered agent).
Rule of thumb: set aside one-eleventh of every taxable sale and the tax from every pay run in a separate account the day the money arrives. When the BAS is due, the cash is already there.
Common mistakes when calculating BAS
- Dividing all sales by 11: GST-free and input-taxed sales belong in G1 but generate no GST at 1A.
- Claiming credits without paperwork: purchases over $82.50 need a valid tax invoice before you claim at 1B.
- Claiming GST that was never charged: wages, GST-free items and purchases from suppliers not registered for GST carry no credit.
- Using the wrong period: cash basis follows payments, accruals follows invoices. Mixing the two moves GST between quarters.
- Paying T7 when income has dropped: if your income has fallen, consider varying the instalment rather than overpaying for the year.
FAQ about calculating BAS
How do I work out the GST on my sales for the BAS?
Add up your taxable sales for the period including GST, then divide that total by 11. The result goes at 1A. GST-free and input-taxed sales are included in G1 total sales but carry no GST, so leave them out of the divide-by-11 step. Report whole dollars only and round down, as the ATO instructions require.
Do I still need to fill in W1 if I use Single Touch Payroll?
No. The ATO says that if you report through Single Touch Payroll you no longer need to report amounts at W1 on your activity statement. You still report the tax withheld at W2 and the total at W5, which carries across to label 4 in the summary. Check the pre-filled figures against your payroll reports before lodging.
What is the difference between Simpler BAS and the full reporting method?
Simpler BAS is the default for businesses with GST turnover under $10 million. You report only G1 total sales, 1A GST on sales and 1B GST on purchases. Businesses with GST turnover of $10 million or more must use full reporting, which adds export sales, other GST-free sales, capital purchases and non-capital purchases.
When is my quarterly BAS due?
For quarterly lodgers the due dates are 28 October, 28 February, 28 April and 28 July. If you lodge online you may get an extra two weeks for most quarters, but not the December quarter because its due date already includes a one-month extension. A registered tax or BAS agent may have later lodgment dates.
What happens if I get my BAS wrong?
Many GST mistakes can be corrected in your next BAS. If an error cannot be corrected that way, you revise the original statement, and conditions differ for credit and debit errors. Underpaid amounts attract general interest charge, and lodging late can trigger a failure to lodge penalty, so fix errors as soon as you find them.
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Talk to a registered tax agent
Nanak Accountants can prepare, check and lodge your BAS through our BAS and GST lodgement service, including reconciling GST codes and STP figures. Call 1300 626 258 or contact us online. Mistakes can be fixed later through the ATO correction process, but it is cheaper to get them right first time.
This article is general information only and is not personal tax or legal advice. Figures and rules were checked against the ATO GST reporting, GST credit, accounting method, PAYG withholding, PAYG instalment, BAS due date, penalty and interest pages on 7 October 2026. Rates and thresholds change, so confirm the current position before acting.
