BAS, GST, PAYG and super: managing the payments that catch businesses out

Ask an accountant which bills cause the most panic among small business clients and the answer is almost always the same: the BAS. Not because the amounts are unfair, but because the money to pay them was spent weeks ago on wages, stock and rent. From 1 July 2026, Payday Super adds another regular obligation to the mix. Understanding how these payments work, and setting them aside as you go, prevents most shocks. Funding handles the rest.

What is actually in your BAS

Your business activity statement can include several obligations at once:

• GST collected on sales, less GST credits on purchases, for GST-registered businesses.
• PAYG withholding deducted from employees’ wages.
• PAYG instalments, which are prepayments of income tax.
• Other items such as fuel tax credits or fringe benefits tax instalments, depending on the business.

Most small businesses lodge quarterly, with some lodging monthly. The ATO publishes the due dates, and your tax agent may have later lodgement dates available.

Why it catches businesses out

GST and PAYG withholding are collected throughout the quarter, but they land in your everyday account alongside your own money. It is very easy to use them to cover wages or a supplier payment, telling yourself you will catch up before the BAS is due. In a busy or growing quarter, that catch-up never quite happens, and the bill arrives with nothing set aside. Over a few quarters, that is how many businesses build up ATO debt.

Payday Super from 1 July 2026

Under Payday Super, employers must pay super guarantee contributions at the same time as wages, with contributions reaching employees’ funds shortly after each payday. Businesses that previously paid super quarterly lose the informal buffer of holding super for up to three months. Each pay run becomes larger, and cash needs to be ready more often. Our guide to Payday Super and cash flow explains how to adjust.

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The set-aside system

The most effective habit is a separate account for tax and super:

1. Each time a customer pays, move the GST component into the tax account.
2. Each pay run, move PAYG withholding and super into the same or a second account.
3. If you pay PAYG instalments, add a set amount each week towards those too.
4. Pay the BAS and super from these accounts, not your operating account.

Even moving a rough percentage of every deposit is far better than nothing. Many owners set up an automatic transfer each Monday based on the previous week’s takings, which takes the decision out of their hands. If the tax account ends the quarter with more than the bill, the surplus becomes a small reserve; if it is short, you know exactly how much to plan for, weeks before the due date rather than the day before. Our guide to setting aside tax from every sale gives simple ways to calculate it.

When funding makes sense

Funding is sensible when a gap is genuinely one-off: a quarter where a large customer paid late, a record quarter that produced a bigger GST bill than expected, or the transition to Payday Super. A short-term loan or a line of credit can cover the payment on time, avoiding penalties and interest, and be repaid as the cash comes back. See short-term business loans and business line of credit.

If the business borrows for BAS every quarter, funding is masking a structural issue. Fix the set-aside habit and check margins with the break-even calculator.

If tax is already overdue

If BAS is already overdue, lodge it, then look at your options: an ATO payment plan, funding to pay in full, or a combination. Our page on paying an ATO tax bill compares them, and business loans with ATO debt explains how lenders view existing tax debt.

Directors, take note

For company directors, unpaid PAYG withholding, GST and super guarantee are particularly serious, because they can lead to director penalty notices and personal liability. Keeping these payments current protects you personally as well as the business. Read our guide on director penalty notices and talk to your accountant if any of these are behind.

Choosing between monthly and quarterly BAS

Some businesses find that lodging monthly, where they are eligible to choose it, makes GST easier to manage because each bill is smaller and the gap between collecting and paying is shorter. Others prefer quarterly to reduce paperwork. If BAS shocks are a recurring problem, it is worth asking your accountant whether a different cycle, or voluntary monthly payments towards a quarterly bill, would suit your cash flow better.

An illustrative example

An illustrative electrical contractor with eight staff used to pay super quarterly and relied on that cash to fund materials between progress payments. With Payday Super starting, each fortnightly pay run grew noticeably. The business opened a dedicated tax and super account, moved GST and PAYG withholding into it with every payment received, and arranged a modest line of credit to bridge the first few months of the transition while its set-aside balance built up.

Keep tax and super on time

If a BAS or super payment is due and the cash is not there, tell us the amount and when it is due. There is no credit check to enquire, your details are not sent to a long list of lenders, and a real person reads every enquiry. Accurate information about what is owed helps us suggest the right structure. Apply now.