For many sole traders in Australia, managing the Business Activity Statement (BAS) can feel like a recurring puzzle—especially if GST, PAYG instalments or withholding tax apply. In 2026, with evolving obligations, tighter reporting standards and more online tools, understanding how to prepare, lodge and pay your BAS is essential for staying compliant and avoiding penalties.
This article walks through the entire process of BAS lodgment for sole traders: from understanding what a BAS is, when and how often it needs to be lodged, the step‑by‑step online process, common mistakes to avoid, and practical tips to make the task less stressful. With this guide, sole traders can confidently complete their BAS tasks on time and with fewer headaches.
What Is a BAS and Why Sole Traders Need It
A BAS (Business Activity Statement) is a report to the Australian Taxation Office (ATO) that covers a number of obligations such as goods and services tax (GST), pay‑as‑you‑go (PAYG) withholding, PAYG instalments, and other taxes where applicable.
For sole traders, the BAS matter arises when they:
are registered for GST (typically turnover of $75,000+ or choose to register voluntarily).
have to pay PAYG withholding because they employ staff.
are required to make PAYG instalments on their business income.
Consider the following: even if no tax is owing, a sole trader may still have to lodge a “nil” BAS. The ATO defines this clearly—“Even if you have nothing to report for the period, you still need to lodge your BAS as ‘nil’ by the due date.”
Key takeaway: Understanding your registration status (GST, PAYG) and your lodgement frequency will determine when and how your BAS must be lodged.
Lodgment Frequency & Due Dates for 2026
How often a sole trader lodges BAS depends on their turnover and registration status:
Monthly: Usually required for businesses with GST turnover above $20 million (less common for small sole traders).
Quarterly: This is the most common schedule for sole traders registered for GST but with modest turnover.
Annual: Available in select circumstances (e.g., turnover under threshold and voluntarily registered for GST) but sole traders should check eligibility.
For example, for quarterly BAS: Quarter 1 (Jul‑Sep) is due 28 October, etc. Due dates may differ if lodging through a registered BAS agent—agents often receive extended due dates under the BAS Agent Lodgment Program.
Important: Late lodgment or payment can trigger penalties and interest charges—so calendar reminders or bookkeeping software are highly recommended.
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Step‑by‑Step BAS Lodgment for Sole Traders in 2026
Here is a clear path to follow for lodging your BAS:
Step 1: Prepare Your Records
Ensure all sales and purchases for the period are recorded, with valid tax invoices where GST is claimed.
Reconcile your bank statements, invoices, receipts and any employee wage payments if you’re withholding PAYG.
Identify the correct codes in the BAS (e.g., G1, 1A for GST on sales, 1B for GST credits) using the ATO’s “Simpler BAS GST bookkeeping guide” as reference.
Determine whether you are required to report PAYG instalments, PAYG withholding or other taxes.
Step 2: Access the Online Lodgment Service
Log in to your myGov account linked to the ATO, or access Online Services for Business.
Navigate to the “Activity statements” section and locate the BAS for your period. If it doesn’t appear automatically, check your ABN registration settings.
Confirm that your business details (ABN, business name, GST status) are correct—errors here can affect lodging.
Step 3: Complete the BAS Form
Enter G1 – Total sales (GST‑inclusive or exclusive – choose and remain consistent).
Enter 1A – GST on sales if taxable supplies include GST.
Enter 1B – GST credits on purchases if you’ve incurred GST on business purchases you’re entitled to claim.
Enter any W1/W2 codes for PAYG withholding if you have employees.
Enter any T2, 7A, or other tax codes if relevant (luxury car tax, wine equalization tax, etc.).
Confirm the calculated amount: either a payment due or refund credit.
Step 4: Review & Lodge
Review all entries carefully—once lodged, amendments will require extras steps.
If all good, click “Lodge”. The ATO will send a lodgement confirmation receipt. For electronic lodging, many sole traders receive bonus 2‑week deferral of due date.
Note the payment due date if you owe an amount.
Step 5: Payment
If the BAS shows a payment is owed, pay it by the due date via BPAY, credit card or online transfer.
If you are owed a refund, ensure your bank account details are up to date in your ATO settings for the credit.
Step 6: Record Keeping & Correction of Mistakes
Keep all records for at least 5 years: invoices, receipts, reconciliations. The ATO emphasizes sound record‑keeping.
If a mistake is found after lodging, revise the BAS via “View or revise activity statements” in your account.
Practical Tips & Common Mistakes to Avoid
Tip 1: Use Accounting Software
Cloud bookkeeping software (e.g., Xero, MYOB, QuickBooks) can automate GST tracking and BAS drafting, reducing errors.
Tip 2: Set Aside GST & PAYG Instalment Funds
Cash‑flow issues often happen when GST or PAYG instalment amounts are forgotten—set aside a portion of income for tax obligations.
Tip 3: Confirm Your GST Registration Status
If turnover is approaching or above $75,000 you must register for GST—failing to do so will affect your BAS.
Mistake to Avoid: Claiming GST Credits Incorrectly
Only claim GST credits on purchases directly relevant to your taxable sales; incorrect claims may trigger ATO review.
Mistake to Avoid: Late Lodgment or Payment
Late BAS lodgment can incur penalties and reduce refunds; even a “nil” BAS must still be lodged on time.
Benefits of Staying On Top of BAS
Accurate BAS helps reflect actual business performance by tracking sales, expenses and GST credits.
Up‑to‑date BAS ensures better cash flow management—knowing your tax obligations ahead of time avoids surprises.
Good compliance avoids ATO audits, penalties and interest. Being on time enhances credibility with suppliers, banks and clients.
For sole traders wanting to scale or engage larger clients, having your BAS and GST obligations sorted signals a professional business.
Call to Action
If you’re a sole trader preparing your BAS this year, share this article with your fellow business owners, subscribe for quarterly reminders and tips on GST‑compliance and tax readiness, and comment below with your biggest BAS challenge—let’s tackle it together. Getting your BAS lodgement right means less stress and more time for growing your business.
Conclusion
Lodging a BAS might feel routine, but for sole traders in 2026 it’s a critical part of business compliance and financial management. By understanding what the BAS covers, adhering to due dates, preparing the correct figures and using the online system efficiently, sole traders can complete their BAS with confidence and avoid common traps.
Regular reconciliation of sales and purchases, disciplined record‑keeping and timely payments will support better business performance—and keep the ATO happy. With the steps, tips and links shared in this guide, sole traders are better equipped to meet their BAS obligations and focus on what they do best: running their business.
See Also: PAYG vs ABN in Australia 2026: Which One Should You Use?
