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chapter four of six. Main types of finance.

Working out your GST refund or payment

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Small business guides > Quick guide to GST and BAS > Working out your GST refund or payment

Working out your GST refund or payment

When submitting a business activity statement – which includes the GST return – most businesses must account for all of their purchases and sales. Let’s take a look at the maths you need to do, and some practical bookkeeping tips.

GST is a simple formula

You work out GST by comparing the amount you paid on purchases to the amount you collected on sales.

How to work out GST

You may need to make adjustments for assets, such as a car or computer, that are shared between your business and family. Visit the ATO page on adjusting GST to find out more.

How to work out GST in four steps

1. Note the GST paid on your business purchases

How to work out GST you can claim

2. Note the GST collected on sales

How to work out GST you owe

3. Add both types of GST

Calculations for filing a GST return

4. Run the GST formula

GST formula

Avoid nasty surprises with smart bookkeeping

Like any business, you’ll aim to sell more than you buy. If you succeed in doing that, you’ll most likely end up with a GST bill to pay. Run the four-step GST calculation regularly so you can:

  • work out how big your GST payment is shaping up to be

  • transfer cash to a separate bank account to cover the GST you’ll need to pay

Automate your GST calculations

You can use online accounting software like Xero to stay on top of GST. It automatically collects sales and purchase information from multiple sources, and does the maths for you.

The software keeps a running count of your GST situation so you always know where you stand. When your business activity statement (including your GST return) is due, you just connect to the ATO and submit it online. All the information is ready to go.

Chapter 6: BAS: what is it and how to lodge it

There’s no need to feel daunted by business activity statements. We’ll take you through BAS reporting cycles and paying GST.

Read next chapter

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Everything you need to know about GST and BAS in Australia.

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