Short version: if your business earns $75,000 or more a year, you must register for GST and lodge a BAS. Even below that, many tradies register voluntarily so they can claim back the GST on tools and materials. Set aside the GST and PAYG money as you’re paid, and lodge on time, and BAS becomes routine.
What BAS is
A Business Activity Statement (BAS) is how you report and pay GST, and any PAYG instalments or PAYG withholding, to the ATO. Most small businesses lodge quarterly. Larger or high-turnover businesses may lodge monthly.
Do you need to register for GST?
You must register when your GST turnover is $75,000 or more, or you expect it to be. You have 21 days to register once you reach it. Some businesses, such as taxi and ride-share drivers, must register regardless of turnover. If you’re under the threshold, you can still register voluntarily. Check the ATO website for the current rules, and ask your accountant about your situation.
Why register even if you don’t have to
- You can claim GST credits on business purchases, like materials, tools and a work vehicle.
- Some larger clients prefer or expect GST-registered suppliers.
The trade-off
You must charge GST on your jobs, which can make you look 10% more expensive to private customers who can’t claim it back. Your quotes need to be clear about whether GST is included.
How GST works for a tradie
- You charge your client GST on top of your price (10% in Australia).
- You pay GST on your business costs, such as materials, fuel, tools and some vehicle costs.
- Each period you subtract the GST you paid from the GST you collected. If it’s positive, you pay the ATO the difference. If it’s negative, you get a refund.
Keep the tax invoices for anything you claim. Without a valid invoice or receipt, you can’t claim the credit.
BAS due dates
Quarterly BAS is generally due about four weeks after each quarter ends, and the due dates are published by the ATO each year. If you use a registered tax or BAS agent, you may get extra time. Check the ATO’s current due dates, or use the reminders in your accounting software.
Other things on a BAS
- PAYG instalments: prepayments toward your income tax, based on your income.
- PAYG withholding: tax you take out of employees’ wages and pay to the ATO.
- Fuel tax credits: you may be able to claim fuel used in heavy machinery or some vehicles.
Super for employees is paid separately, not through your BAS.
Stay on top of it
- Open a separate account for tax. Move a set percentage of every payment into it so the BAS bill isn’t a shock.
- Record every expense the day you have it. A photo of the receipt, taken with your accounting app, does the job.
- Reconcile monthly, so the quarter’s numbers aren’t a pile of unknowns.
- Talk to the ATO early if you can’t pay. They can arrange a payment plan, and that’s far better than ignoring it.
Mistakes to avoid
- Spending the GST you collected
- Claiming GST on private costs
- Claiming credits without a tax invoice
- Lodging late, which can mean penalties and interest
For more on what you can claim at tax time, see our tax deductions checklist.
Worked example: one quarter of GST
This is an illustration. Suppose that in a quarter you invoice clients $44,000 including GST, so you’ve collected $4,000 in GST. You also spent $16,500 on materials, fuel and tools including GST, so you paid $1,500 in GST on those costs. Your GST for the quarter is $4,000 minus $1,500, so you’d owe the ATO $2,500, before any PAYG instalments or withholding.
Cash or accruals?
Small businesses can often choose to account for GST on a cash basis, meaning you report GST when you’re paid and when you pay your suppliers, instead of when you issue or receive invoices. Cash accounting helps with cash flow if clients pay slowly. Ask your accountant which suits you and check the current ATO rules.
A simple weekly routine
- Photograph receipts the day you get them.
- Match bank transactions in your accounting software once a week.
- Move your GST and tax percentage into a separate account every time you’re paid.
- Check that every invoice sent has been paid or is being chased.
What if you can’t pay your BAS?
Lodge on time anyway, even if you can’t pay in full, and contact the ATO. They can set up a payment plan, and it’s far better than ignoring it, which can lead to penalties and interest.
BAS and GST for tradies: FAQs
How often do I lodge a BAS?
Most small businesses lodge quarterly. Some lodge monthly, and a few lodge annually. The ATO tells you your cycle when you register for GST.
Can I claim GST on my ute?
Where the vehicle is used for business you can generally claim GST credits in proportion to business use, subject to the car limit. Check the current rules with your accountant.
Do I need an accountant for BAS?
You can lodge it yourself with good records and software, but a registered tax or BAS agent can save time and catch errors.
What happens if I register for GST late?
You may owe GST on sales since you should have registered, even if you didn’t charge it. Register as soon as you reach the threshold.
Sources and further reading
General information only, not tax or financial advice. Rules and thresholds change, so check the ATO website and speak to a registered tax or BAS agent. We may earn a commission if you sign up through links on this site, at no extra cost to you.