What’s the Fuss About?

You might have received a notice from the ATO saying you need to start reporting your PAYGW monthly instead of quarterly on your BAS. Before you panic, no, you’re not paying more tax—let us explain.

Quarterly BAS vs. Monthly IAS: A Quick Overview

In a nutshell, BAS (Business Activity Statement) is usually a quarterly report that includes your GST payable/refundable and PAYGW (Pay As You Go Withholding) (among other things). The monthly IAS (Instalment Activity Statement)is solely for reporting PAYGW.

When the ATO registers you for monthly IAS reporting, it just means you go from paying your PAYGW quarterly, to monthly.

Then: You used to report PAYGW quarterly on your BAS.
Now: You’ll report your PAYGW monthly via an IAS. This is usually due on the 21st of the following month.

This doesn’t mean you’re paying more tax; you’re simply spreading it out over smaller, more frequent payments.

Example: PAYGW Payments Made Easy

Let’s run through a live example. Pretend it’s the start of the 2024 financial year and your business incurs $5,000 of PAYGW every month and $2,000 of GST payable every quarter.

Old Method (Quarterly BAS)

• September 2023 BAS – (usually due 25 November if you lodge through an Accountant)
  • PAYGW Payable – $15,000
  • GST Payable – $2,000

Total payable: $17,000

New Method (Monthly IAS)

• July 2023 IAS – due 21 August 2023
  • PAYGW Payable – $5,000
• August 2023 IAS – due 21 September 2023
  • PAYGW Payable – $5,000
• September 2023 BAS – (usually due 25 November if you lodge through an Accountant)
  • PAYGW Payable – $5,000
  • GST Payable – $2,000

Total payable: $17,000

See? You’re still paying the same amount overall; it’s just divided into monthly chunks instead of quarterly sums.

How to Adapt

The best way to adapt to this change is by revising your business’s cash flow and budget to accommodate these more frequent payments. Monthly payments might even improve your cash flow, as it’s smaller, more manageable amounts.

Realistically though, you should be in the habit of setting aside funds for BAS, Income Tax  and your bills on a monthly basis. If you’ve been doing this then the switch from Quarterly BAS to the Monthly IAS should not impact you much at all.

By understanding these changes, you can adjust your payment schedule accordingly and remove any stress or confusion. If you have any questions, we’re here to help—just reach out.

We hope you’re enjoying our blog, just a note though. The information provided here is intended for general informational and educational purposes only. While we aim for accuracy, we can’t guarantee that this content will apply to your specific situation—every business owner’s circumstances are unique.

This blog is not a substitute for personalized advice from a qualified accountant, tax advisor, or any other professional. If you have questions specific to your individual circumstances, we strongly recommend consulting a professional for tailored advice.