BAS – Paying GST and PAYG

Companies collect Goods and Services Tax (GST) on behalf of the ATO, and also withold personal income tax amounts and pay that on behalf of the employee direct to the ATO under a Pay As You Go (PAYG) model which avoids people getting a large tax bill at the end of the year.

The company must submit Business Activity Statements (BAS) at agreed periods (monthly, quarterly or annually) depending upon the level of GST applicable turnover. The BAS will show the GST, PAYG (and other taxes as appropriate) due from the company to the ATO for the period of the BAS.

When using accounting software, the financial position will be tracked ex-GST with the payable taxes recorded separately. When managing the accounts manually, be aware of the accumulating amount as money to be held in reserve.