Tax guide: Key Tax Terms

STEP 1 | Small business tax 101

Welcome to your quick guide on essential tax terms and dates! We’ve made it simple and fun, so you can breeze through tax season without breaking a sweat. Let’s get started!

Key takeaways:

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Guide to Australian tax terms for sole traders covering GST BAS PAYG and EOFY requirements

GST

Goods and Services Tax

A 10% tax on goods and services sold in Australia. If you’re making over $75,000 a year, you’re in the GST club!

BAS

Business Activity Statement

This quarterly form sums up your income, GST collected from clients, and GST paid on expenses. It’s your business’s way of keeping the ATO in the loop.

PAYG

Pay As You Go

Spreads out your annual tax payments. Based on last year’s tax return, most freelancers and sole traders need to make these instalments.

EOFY

End of Financial Year

June 30th wraps up the financial year. July 1st starts it all over again!

When to Submit Your Income Tax Return

Self-lodging: By October 31st

With a registered tax agent: By May 15th

When to Submit Your BAS Forms

The ATO will send you an alert via the MyGov portal before you need to make payments, but it’s still a good idea to mark down these BAS due dates.

  1. Quarter 1

    July - September

    October
    28

  2. Quarter 2

    October - December

    February
    28

  3. Quarter 3

    January - March

    April
    28

  4. Quarter 4

    April - June

    July
    28

Pro Tip: If you’re using a tax agent, you get an extra 30 days to submit your BAS.

Ask the Expert...

What’s the deal with quarterly tax payments versus the annual tax return?

Your annual tax return summarises your entire financial year’s income and expenses. The ATO uses this info to estimate your PAYG payments for the next year. While your fourth quarterly payment might coincide with your annual tax return, they’re not the same. You need to file both!

Why Tax Time is Easier with Sole

Sole takes the stress out of tax time with automatic tax estimates, GST tracking, instant reports, and more. We’ve partnered with Accountants Direct to provide expert advice, making sure you get the best out of your tax return.

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Frequently asked questions

    Do I have to lodge a BAS if I’m not registered for GST?

    Usually, no. If you aren’t registered for GST and haven’t been entered into the PAYG instalment system, you typically won’t need to lodge a BAS. However, once your turnover hits $75k, registration is mandatory.

    What is the difference between an annual tax return and a BAS?

    Your BAS is about “real-time” reporting of GST and instalments during the year. Your Annual Tax Return is the final reconciliation of every dollar you earned and spent, determining if you owe a little more or are due a refund.

    Why did the ATO suddenly start charging me PAYG installments?

    This usually happens after you lodge a tax return that shows business income. The ATO assumes you’ll earn similar (or more) this year and wants to help you “pay as you go” so you aren’t hit with a massive debt later.