14 Nov The basics of GST for ABN registered Australian Businesses
The Basics of GST for ABN Registered Australian Businesses Answered
- What is GST
- How to register for GST
- What is a BAS
- What are the options to record GST
- How is GST calculated
- What are the due dates for BAS
- When GST is due for payment
- I need assistance with my GST obligations
1. What is GST
Goods and Services Tax also commonly known as GST is the 10% tax you will notice on most goods, services and items sold or consumed in Australia.
2. Do I need to register for GST
You MUST register for GST if:
- Your business has a GST turnover (gross income minus GST) of $75,000 or more, or
- Your non-profit organisation has a GST turnover of $150,000 per year or more, or
- You provide a rideshare service e.g. Uber, Ola, Taxi etc. This applies to both owners and those who lease a rideshare vehicle, or
- Your want to claim fuel tax credits for your business
3. How to register for GST
It all starts with registering for GST with the Australian Taxation Office (ATO). You will need to advise the start date of the GST registration and whether you will be reporting on a cash basis or accrual basis. Our team at POP can help you register for free.
Cash Basis = when cash goes in and out of bank account
Accrual Basis = report based on invoice date
Invoice is on 29 September 2018, payment is made to the bank on 15 October 2018.
Cash = report on 15 October 18
Accrual = report on 29 September 18
4. What is a BAS
Now that you are registered for GST you will need to report the GST on your sales and expenses to the ATO on a document called the “Business Activity Statement” also commonly referred to as your BAS.
Your Gross Income will also be recorded on this document. After all these elements are recorded, this will either result in a GST payable or GST refundable which is dependent on your transactions. This must be done on at least a quarterly basis and the dates are shown below.
5. What are the options to record GST
There are a few ways to record your GST and we will list the two most common and easiest ways:
- The simplest way is to review your bank statement regularly and record the GST amounts for Sales and Expenses in an appropriate document like a spreadsheet. At the end of each reporting period you can disclose the correct amounts easily by referring to this spreadsheet.
- Set up an accounting software such as Xero, Myob, or Quickbooks that links to your bank account and can assist in categorising your transactions easily. Our team at POP can assist in the correct set up to save you time and headaches.
6. How is GST calculated?
Say you pay $2,000 for some new equipment that has GST included (already in the price).
The GST on this expense is $2,000/11 = $181.82
$181.82 will be refundable by the ATO if you are registered for GST. This will be reported in your BAS.
7. What are the due dates for BAS?
Once you are registered, normally you would report on a quarterly basis, via a Business Activity Statement also known as a BAS. The BAS due dates are below:
|Reporting periods||Due date||Lodging with POP|
|1 Jul – 30 Sep||28th Oct||25th Nov|
|1 Oct – 31 Dec||28th Feb||–|
|1 Jan – 31 Mar||28th Apr||25th May|
|1 Apr – 30 Jun||28th Jul||25th Aug|
8. When GST is due for payment
Once POP lodges your BAS, you will receive a summary email detailing the GST payable and due date, or GST refund which will be paid by the ATO within the week.