BAS and reporting
GST reporting cycle
The GST reporting cycle is how often a registered business reports its GST to the ATO, usually quarterly, but monthly or annual depending on turnover and election.
The GST reporting cycle is the schedule on which you report GST to the ATO and pay or claim the net amount. When you register for GST you are placed on a cycle, usually quarterly. The cycle determines how often you lodge, which periods you report, and when your payments are due. It sits at the core of your GST admin.
There are three common cycles. Quarterly is the standard for most small and medium businesses. Monthly is mandatory above a high turnover level set by the ATO, and available as a choice for those who want it. Annual is available to some small businesses that meet specific conditions, often those voluntarily registered. Each cycle has its own due dates and its own effect on cash flow.
Choosing a cycle is a practical decision. Quarterly reduces paperwork. Monthly suits businesses that regularly receive refunds or want regular visibility of their GST position. Annual suits very small operators who want minimal reporting. A cycle that does not suit your cash flow can cause stress, so review it as the business grows or changes.
Changes to a cycle are generally made through the ATO, either online or through your agent, and take effect from the start of a new period. In some situations the ATO may move you to a different cycle, for example when your turnover grows past a threshold. You will normally be told in advance. Make sure your accounting software is updated to match so that the reports line up.
The cycle works alongside your accounting method. Whether you report on a cash or accrual basis, the cycle decides which period each transaction lands in. Mixing up methods and cycles can lead to items being reported in the wrong period. Consistency is key, and any change should be discussed with your adviser.
A common mistake is forgetting that the cycle for GST may differ from the cycle for other obligations, such as PAYG instalments, which can follow their own timetable. Check your ATO online services account to see what applies to you. Keep records for five years. This is general information only, so confirm your cycle and its rules with the ATO or a registered tax professional.
Worked example
Ravi starts a consultancy and is placed on a quarterly cycle. In his first year, he buys expensive equipment and receives GST refunds, so he asks the ATO to switch him to monthly reporting. The next month he reports credits of $2,500 on a $27,500 equipment purchase (27,500 divided by 11) and receives a refund soon after, rather than waiting up to three months.
Practical tips
- Review your reporting cycle each year, as a cycle that suited a new business may not suit a larger one.
- Check your ATO online services account to see the cycle and due dates the ATO has recorded for you.
- Update your accounting software when your cycle changes so reports match the ATO periods.