Business and corporate taxes can be an overwhelming challenge for business owners, especially new business owners. Rather than spend time sifting through BAS, PAYG and IAS paperwork, let us do the legwork so you can focus on the bigger picture.
Goods and services tax (GST) is a broad-based tax of 10% on most goods, services and other items sold or consumed in Australia. Generally, businesses and other organisations registered for GST will: include GST in the price they charge for their goods and services claim credits for the GST included in the price of goods and services they buy for their business. If you run a business or other enterprise and have a GST turnover of $75,000 or more ($150,000 or more for non-profit organisations), or you provide taxi travel (including ride-sourcing).
You need to know:
If you are a business registered for GST you need to lodge a business activity statement (BAS).
Your BAS will help you report and pay: goods and services tax (GST) pay as you go (PAYG) instalments PAYG withholding tax other taxes.
When we register you for an Australian business number (ABN) and GST, the Australian Taxation Office will send you a BAS when it is time to lodge.
You can lodge your BAS electronically, by mail or for nil lodgments on the phone.
You can pay electronically, by mail or in person at Australia Post. Lodging and paying your BAS on time helps your business run smoothly.
The due date for lodging and paying is displayed on your BAS. If the due date is on a weekend or public holiday, you can lodge and pay on the next business day.
PAYG – or Pay As You Go – is a staff-related tax, which means it is deducted from the gross wage of staff it is applicable on and submitted to the ATO by means of the BAS (discussed above) or IAS (see below). It is deducted as a certain percentage of the staff’s wage and paid to the ATO with your monthly or quarterly reports. As an employer, you have a role to play in helping your payees meet their end-of-year tax liabilities. You do this by collecting pay as you go (PAYG) withholding amounts from payments you make to your employees, such as contractors, that you have voluntary agreements with businesses that don’t quote their Australian business number (ABN).
Remember: You must register for PAYG withholding before you are first required to withhold an amount from a payment. If you cease to be an employer you should cancel your PAYG withholding registration. Before you enter into a work agreement or contract, you need to check that the worker is legally allowed to work in Australia. PAYG withholding is different from payroll tax and is actually a state tax. As a payer, you may need to withhold amounts from payments you make to your workers, other businesses and other payees, and send the withheld amount to us.
Withholding by employers: Your withholding obligations depend on whether your worker is an employee or contractor. If your worker is: an employee, you generally have to withhold amounts from payments you make to them a contractor, you generally do not withhold amounts from payments you make to them (unless they request withholding by entering into a voluntary agreement with you). To check if your worker is an employee or contractor, you need to review the whole working arrangement.
The IAS or Instalment Activity Statement is a form used by taxpayers who are not registered for Goods and Services Tax (GST). It is also the form required to be lodged by entities that prepare a quarterly Business Activity Statement, but are required to remit their Pay As You Go (PAYG) withholding tax on a monthly basis because they are a medium withholder. The IAS is a pre-printed document issued by the Australian Taxation Office every month, which summarises the amounts of PAYG instalments, PAYG withholding and ABN withholding.
If you withhold less than $20k per year, you must do this every month. If the amount is in excess of this amount, it can be done through the BAS. Withholders of large amounts have to remit statement seven days after the payment of wages or fees.
Who uses Instalment Activity Statement? If you own a business or are individual that deals with PAYG Instalments, PAYG withholding, and/or Fringe Benefit Tax Installments, and you aren’t registered for the GST you will need to lodge IAS’s. There are instances, for example, if you are a trustee, where you are required to fill out both business activity statements and IAS forms.
Where do I get the forms from? The Australian Taxation Office will send all your IAS documents well ahead of the completion deadline. This will allow you plenty of time to complete it and have it lodged before the due date. You will also notice that some parts of the form will have already been filled out with some of your personal information in order to save you some time.
Tips to stay on top of your obligations: