The quarter was busy. Invoices went out, money came in, and the bank balance looked healthy. Then the BAS lands, and a big chunk of that balance was never really yours to spend.
So how much should you set aside for BAS? Work out what your BAS will be as you go, not at the end of the quarter, and move that money into a separate account every week or every payday. For most businesses that means 1/11 of every GST-inclusive dollar you receive, less the GST on your bills, plus the PAYG withheld from wages and any PAYG instalment. In the worked example below, that comes to about 15% of every dollar received.
This guide shows you what goes into a BAS, how to work out your own set-aside amount, and a simple weekly routine that stops BAS from ever catching you short.
In short:
- Your BAS is mostly money you’ve collected or held for the ATO, so treat it as the ATO’s money from day one.
- Set aside 1/11 of GST-inclusive receipts, minus GST on business purchases, plus PAYG withheld and any PAYG instalment.
- Move the money into a separate account weekly or each payday, not when the BAS is due.
- From 1 July 2026, super must reach funds within 7 business days of payday, so super is now a payday cost too.
- Check the set-aside account against your Xero GST report every month so there are no surprises.
What goes into your BAS?
Your BAS is a summary of the tax amounts you’ve collected or held for the ATO during the period. For most businesses it covers three main items.
- GST: the GST you charged on sales, minus the GST credits you can claim on business purchases.
- PAYG withholding: the tax you’ve held back from your employees’ wages.
- PAYG instalments: prepayments toward your business’s own income tax, if the ATO has put you into the instalment system.
The first two are other people’s money passing through your account. Your customers paid the GST, and your staff earned the withholding. That’s why spending it and hoping next quarter covers it is one of the fastest ways for a business to get into ATO debt.
How much should you set aside for BAS?
Set aside your actual BAS amount as you earn it, then add a small buffer. You don’t need to guess a percentage. You can work it out from your own numbers.
- GST on sales: take 1/11 of every GST-inclusive payment you receive. A $11,000 payment includes $1,000 of GST.
- Less GST on purchases: take 1/11 of the GST-inclusive business bills you pay that carry GST.
- Plus PAYG withholding: add the tax withheld in each pay run. Your payroll report in Xero shows this figure.
- Plus PAYG instalment: add the instalment amount the ATO has given you, spread evenly across the quarter.
- Plus a buffer: add around 5% to 10% for timing differences and one-off items.
Once you’ve done this for a full quarter, you can turn it into a simple rule of thumb: a set percentage of every dollar that comes in. Review that percentage each quarter, because it moves when your margins, wages or purchases change.
Worked example: a $4M trade business
This is an illustrative example with realistic numbers, not a client story.
Imagine an electrical contractor turning over about $4M a year before GST. It lodges a quarterly BAS. In the July to September quarter, it has these figures:
| Item | Amount for the quarter | BAS amount |
|---|---|---|
| Sales received, including GST | $1,100,000 | $100,000 GST collected |
| Purchases with GST, including GST | $440,000 | $40,000 GST credits |
| Net GST | $60,000 | |
| PAYG withheld from wages | About $450,000 gross wages | $90,000 |
| PAYG income tax instalment | $15,000 | |
| Total BAS to pay | $165,000 |
Spread over 13 weeks, that’s about $12,700 a week. As a share of money received, it’s $165,000 divided by $1,100,000, or 15%.
So the owner sets one simple rule: every Monday, move 15% of last week’s receipts into the BAS account, plus a little extra for buffer. When the BAS is due, the $165,000 is already sitting there.
Now picture the same business without that rule. The $165,000 has been spent on wages, materials and a new ute deposit. The BAS arrives, the overdraft gets stretched, and the owner starts paying suppliers late. Nothing went wrong with the business. The cash was simply never set aside.
Our guide on cash flow and debt for electrical contractors covers the other cash traps in this industry, such as retentions and slow progress claims.
When is your BAS due?
A quarterly BAS is due on the 28th of the month after the quarter ends, except the October to December quarter, which is due on 28 February. A monthly BAS is due on the 21st of the following month.
| Quarter | Months covered | Due date |
|---|---|---|
| Quarter 1 | July to September | 28 October |
| Quarter 2 | October to December | 28 February |
| Quarter 3 | January to March | 28 April |
| Quarter 4 | April to June | 28 July |
You may get extra time if you lodge online or through a registered tax or BAS agent, but quarter 2 already includes an extension. See the ATO’s page on due dates for lodging and paying your BAS.
Businesses with GST turnover of $20 million or more must report GST monthly. Smaller businesses usually report quarterly. Extra time to lodge is useful, but it isn’t extra cash. Plan as if the money is due on the earliest date.
Do you need a separate bank account for BAS?
A separate account isn’t required, but it’s the simplest way to stop yourself spending money that belongs to the ATO. The ATO itself suggests keeping the GST you collect apart from your day-to-day cash flow.
A practical setup for most businesses looks like this:
- Operating account: where customer payments land and bills are paid.
- Tax account: for GST, PAYG withholding and PAYG instalments. Only the BAS is paid from here.
- Profit or reserve account (optional): for income tax not covered by instalments and a cash buffer.
Make the tax account a little harder to reach. Some owners use a different bank, or turn off cards on that account, so the money can’t be used by accident.
How has Payday Super changed BAS planning?
Super is no longer a quarterly cost. From 1 July 2026, under Payday Super, your employees’ super must be received by their funds within 7 business days of paying them, with some exceptions. The old quarterly super dates of 28 October, 28 January, 28 April and 28 July no longer apply (ATO, About Payday Super).
Super isn’t paid through your BAS, but it used to sit alongside it in the same cash crunch at the end of each quarter. Now it leaves your account every pay cycle. That smooths out the quarter, but it also means less cash sits in the bank between paydays.
In the example above, the business pays about $450,000 in gross wages a quarter. At the 12% super guarantee rate, that’s around $54,000 in super a quarter, now paid in roughly equal amounts each payday instead of one lump. If your cash flow forecast still shows super as a quarterly payment, update it.
A weekly routine so BAS never surprises you
A few minutes a week keeps your BAS fully funded. This is the routine we set up with clients.
- Reconcile Xero. Match last week’s bank transactions so your GST figures are current.
- Move the money. Transfer your set-aside percentage of last week’s receipts into the tax account.
- Move PAYG withholding on payday. Transfer PAYG withheld into the tax account in the same session as the pay run, and pay super on time.
- Check monthly. Compare the tax account balance with the GST and PAYG figures in Xero’s Activity Statement. Top up if there’s a gap.
- Review quarterly. Once the BAS is lodged, check whether your percentage was right and adjust it for next quarter.
If your books are behind, this routine falls over quickly. That’s where our bookkeeping packages help: Xero reconciled weekly, payroll and super handled, and BAS prepared with no last-minute scramble.
What happens if you can’t pay your BAS on time?
Lodge on time anyway, then talk to the ATO about a payment plan as early as you can. Not lodging can bring penalties on top of the debt, and it makes the conversation with the ATO harder.
Unpaid amounts also attract the general interest charge, which is calculated daily and compounds on the overdue balance. Since 1 July 2025, that interest is no longer tax deductible (ATO, general interest charge). That makes ATO debt a more expensive way to fund a business than it used to be.
If you’re short more than once, treat it as a warning sign. It usually means cash is stuck in debtors or stock, or that profit isn’t as strong as it looks. Our guide to improving profit margins is a good place to start on the profit side.
Common questions
Can I use the BAS money for a short-term cash gap?
You can, but it’s risky and it tends to become a habit. If the gap isn’t closed before the BAS is due, you’re left with ATO debt and daily interest. A planned overdraft or a short-term facility is usually a cleaner way to cover a gap.
Does cash or accrual GST accounting change how much I set aside?
It changes the timing. On a cash basis, you report GST when you’re paid, so setting aside from receipts works well. On an accrual basis, you report GST when you issue the invoice, so you may owe GST on sales you haven’t been paid for yet. Businesses with aggregated turnover under $10 million can choose cash accounting.
How much buffer should I keep in the tax account?
Around 5% to 10% above your expected BAS is a sensible starting point. Increase it if your sales swing a lot from month to month, or if you have large one-off items like equipment purchases that change your GST credits.
Should my bookkeeper manage the tax account?
Your bookkeeper can calculate the weekly transfer and check the balance each month, but the owner should still see it. A short monthly report that shows the tax account against what’s owed is enough to stay in control.
Want BAS to stop being a surprise?
Book a free call with our team and we’ll help you work out your set-aside percentage and a cash plan for the quarter. You can also compare our bookkeeping packages, or start on your own with our free Run your business with Complete Financial Clarity Excel template.
Related reading
- When do you need a virtual CFO? 7 signs it’s time
- How to prepare your financials for a business loan
- Geelong business cash flow: plan now for summer
- How to build a 13-week cash flow forecast
This article is general information only and doesn’t take your circumstances into account. Speak with a qualified adviser before making decisions.
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