GST, BAS & Bookkeeping: Financial Compliance for Early-Stage Australian Startups

Most founders focus all their energy on product and customers in the early months — and rightly so. But the financial and tax compliance decisions you make (or fail to make) in the first year have compounding consequences that can be expensive and stressful to unwind later.

Consider three common scenarios that catch Australian founders off guard:

• Missing the GST registration deadline: Once your startup's GST turnover hits $75,000, you must register within 21 days. Founders who miss this window may face ATO penalties and the unpleasant task of retrospectively accounting for GST on invoices already issued without it.
• Poor record-keeping sinking an R&D tax claim: The R&D Tax Incentive can deliver a significant refundable tax offset for eligible tech startups — but the ATO requires contemporaneous records created at the time the R&D was conducted. Founders who start documenting their R&D after the fact will find their claim rejected or heavily reduced.
• BAS errors triggering an audit: Incorrectly claiming input tax credits — or failing to remit GST collected from customers — can trigger ATO reviews and penalties that far exceed the original tax amount.

Getting these fundamentals right from day one costs very little. Getting them wrong can cost far more in penalties, professional remediation fees, and lost opportunities like R&D claims. This guide gives you a practical, founder-grade understanding of every obligation so you can stay on the front foot.

For an early-stage Australian startup, financial compliance falls into five main areas — each covered in detail in this guide:

1. GST (Goods and Services Tax): Understanding when you must register, how to account for the 10% tax on your sales and purchases, and when voluntary early registration works in your favour.
2. BAS (Business Activity Statement): The quarterly (or monthly) ATO form that brings together your GST obligations, PAYG withholding, and PAYG instalments in one lodgement.
3. Single Touch Payroll (STP): The mandatory digital payroll reporting system that kicks in the moment you hire your first employee.
4. Record-keeping: The legal requirements around how long to keep records (5 years under the ATO, 7 years for ASIC-registered companies) and the specific documentation needed for future R&D tax claims.
5. Professional support: When to use accounting software alone, when to engage a bookkeeper or registered BAS agent, and when you need a qualified accountant.

GST (Goods and Services Tax) is a broad-based tax of 10% on most goods, services, and other items sold or consumed in Australia. Registered businesses charge GST on top of their prices, collect it from customers, and then remit the net amount to the ATO after claiming credits for GST they paid on their own business purchases (called input tax credits).

The key mechanic: GST is not a cost to a registered business — it is a pass-through. You collect GST from your customers on behalf of the ATO, deduct what you paid to your suppliers, and remit the difference. If you paid more GST on purchases than you collected on sales (common in pre-revenue phases with high startup costs), the ATO refunds the difference.

GST is always calculated as 1/11th of the GST-inclusive price. For example: a $1,100 GST-inclusive invoice contains $100 of GST. The ATO's guide on how Australian GST works (updated September 2025) provides a comprehensive overview of the mechanics.

You must register for GST when your current or projected GST turnover reaches $75,000 per year for a standard business. Key points from the ATO's GST registration guidance (updated May 2025):

• 21-day rule: Once you reach the threshold (or reasonably expect to in the current year), you must register within 21 days. Failing to register on time means the ATO can hold you liable for GST on all sales made since the threshold was crossed, even if you didn't charge your customers GST.
• GST turnover definition: "GST turnover" means your gross income from Australian sales, excluding GST itself, input-taxed supplies (e.g., financial supplies, residential rent), and certain other items. It is different from your accounting revenue figure — confirm the calculation with your accountant or BAS agent.
• Non-profit exception: Non-profit organisations have a higher threshold of $150,000 per year.
• Taxi/ride-share exception: These providers must register regardless of turnover — the $75,000 threshold does not apply.

Registration is free and is done via ATO Online Services for Business, by phone on 13 28 66, or through a registered tax or BAS agent. An ABN is required before registering for GST.

Voluntary GST registration — registering before you hit the $75,000 threshold — can be financially advantageous for early-stage startups in certain situations. The ATO's guidance on voluntary GST registration notes these key points:

When voluntary registration makes sense:

• You have significant pre-launch costs — equipment, software subscriptions, cloud services, legal and accounting fees, office expenses — all of which include embedded GST that you can claim back as input tax credits once registered.
• You are in a product development or pre-revenue phase and spending more than you are earning. Voluntary registration converts that outgoing GST into a refund from the ATO at each BAS lodgement.
• Your customers are primarily GST-registered businesses (B2B) — for them, the GST on your invoices is a neutral pass-through. Adding GST to your prices doesn't make you more expensive in their eyes; they claim it straight back.

The key restriction: If you register voluntarily, you must remain registered for at least 12 months before cancelling (unless your business ceases to exist). Registration also means lodging BAS statements on time — adding an administrative obligation.

When to hold off: If your customers are primarily consumers (B2C) who cannot claim input tax credits, adding 10% GST to your prices before you have to could reduce your competitiveness. In that case, wait until you approach the $75,000 threshold.

Not everything you sell — or buy — is subject to 10% GST. Understanding these three supply categories is essential for correct BAS preparation. The ATO's Simpler BAS GST bookkeeping guide (updated May 2025) sets out the full framework.

Taxable supplies: GST of 10% is charged on the sale. You collect the GST and can claim input tax credits on related purchases. Examples: most software products and SaaS subscriptions, consulting and professional services, hardware and equipment, advertising.

GST-free supplies: No GST is charged on the sale — but you can still claim input tax credits on purchases related to making those supplies. Examples: most basic fresh food, many medical and health services, most education courses, childcare, and — critically for tech startups — exports of services to customers outside Australia. A SaaS startup billing international customers generally does not charge GST on those sales. However, the specific rules on export of services are nuanced, and founders should confirm treatment with a tax adviser.

Input-taxed supplies: No GST is charged on the sale, and you cannot claim input tax credits on related purchases. Examples: residential rent, most financial supplies (lending money, selling shares, providing credit). Startups providing financial services should take particular care here, as it affects the deductibility of GST on their expenses.

A Business Activity Statement (BAS) is the form you submit to the ATO to report and pay multiple tax obligations in a single lodgement. Rather than filing separate returns for each type of tax, the BAS consolidates them. The ATO's BAS overview page describes it as the key reporting mechanism for businesses registered for GST.

A typical BAS covers:

• GST: GST collected on sales (your output tax) minus GST credits claimable on purchases (your input tax credits). The net amount is either paid to or refunded by the ATO.
• PAYG withholding: Tax withheld from employees' wages and certain contractor payments, which must be remitted to the ATO.
• PAYG instalments: Pre-payments of your own estimated income tax liability (see below). These prevent a large end-of-year tax bill.
• Other obligations (if applicable): fringe benefits tax (FBT) instalments, fuel tax credits, wine equalisation tax (WET), and luxury car tax (LCT).

For most early-stage startups with no employees yet, the BAS will primarily cover GST and possibly PAYG instalments. Once you hire staff, PAYG withholding becomes part of the mix.

BAS lodgement frequency depends on your business's annual GST turnover. The ATO's activity statement due dates page (updated 1 July 2025) sets out the full schedule:

• Quarterly (most early-stage startups): Businesses with annual GST turnover under $20 million. BAS is due on the 28th of the month following each quarter end.
• Monthly (larger businesses or by election): Mandatory for businesses with $20 million+ annual GST turnover. Smaller businesses can elect monthly. Due: 21st of the following month.
• Annually (very small businesses): Available to certain small businesses under an annual GST reporting concession.

Quarterly BAS due dates for 2025–26:

• Quarter 1 (July–September 2025): 28 October 2025
• Quarter 2 (October–December 2025): 28 February 2026 (extended from 28 January)
• Quarter 3 (January–March 2026): 28 April 2026
• Quarter 4 (April–June 2026): 28 July 2026

Registered tax or BAS agent advantage: If you engage a registered tax or BAS agent to lodge your BAS, you may qualify for extended due dates under the ATO's lodgement program — giving you additional time beyond the standard deadlines.

PAYG (Pay As You Go) instalments are regular prepayments of the income tax you expect to owe at year-end on your business and investment income. The ATO automatically enrols businesses and individuals in PAYG instalments when their income or tax liability exceeds certain thresholds — generally when notional tax exceeds $1,000.

According to the ATO's PAYG instalments guidance, the key mechanics are:

• How instalments are calculated: The ATO calculates an instalment amount based on your prior-year income, adjusted by the GDP uplift factor. Alternatively, businesses can elect to use the instalment rate method — calculating instalments based on actual current-year income. This second option is more work but more accurate for startups with volatile or rapidly growing revenue.
• When they are due: For most businesses, PAYG instalments align with BAS — quarterly, due on the same dates. The ATO's PAYG instalment due dates page (updated March 2026) confirms the timing.
• Annual instalment option: If your notional tax notified by the ATO is less than $8,000 and other conditions are met, you may pay a single annual instalment, due 21 October. This reduces administrative overhead for early-stage startups with modest tax liabilities.
• Credit at year-end: All PAYG instalments paid during the year are credited against your annual income tax assessment. If instalments exceed your actual liability, you receive a refund.

Practical note for founders: If your startup is growing rapidly and prior-year instalments seem too high (or too low) relative to actual income, you can vary the instalment amount by lodging a variation with the ATO. Varying too far below actual liability may attract a penalty, so use care.

Single Touch Payroll (STP) is an Australian Government initiative requiring employers to report employees' payroll information to the ATO digitally each time payroll is run — not just at year-end. Per the ATO's STP guide, it has been mandatory for all employers since 1 July 2019.

Each pay run, your STP-enabled software automatically submits to the ATO:

• Salaries and wages paid
• PAYG withholding amounts
• Superannuation liability information

STP Phase 2 (expanded from 1 January 2022) collects more granular income type categorisation and shares relevant information with other government agencies such as Services Australia (for welfare payment assessments). It does not change the amounts you pay — just how they are reported.

Key implications for startups:

• Before your first hire: No STP obligation exists. Focus on getting your accounting software set up properly.
• On your first payday: STP reporting must commence immediately. There is no grace period for new employers. New employers must start with STP Phase 2 from the first payday.
• End-of-year finalisation: A finalisation declaration must be submitted by 14 July each year, allowing employees to lodge their own tax returns using confirmed income information available via myGov. This replaces the old payment summary (group certificate) system.
• Penalties: Failure to report through STP may attract failure to lodge (FTL) penalties.

Setting up STP is straightforward if you are already using one of the major cloud accounting platforms. All three leading Australian platforms — Xero, MYOB, and QuickBooks Online — support STP Phase 2 reporting natively.

The practical steps are:

1. Choose STP-enabled payroll software before your first hire. If you are already using Xero, MYOB, or QuickBooks for accounting, their payroll modules handle STP automatically.
2. Set up your payroll details: employee TFNs, employment type (full-time, part-time, casual), salary or hourly rate, superannuation fund details, and bank account information for direct deposits.
3. Run payroll: the software submits the STP report to the ATO automatically each time you process a pay run. No separate ATO lodgement is needed.
4. Submit the annual finalisation declaration by 14 July each year via your payroll software.

Superannuation reminder: Employers must pay superannuation guarantee contributions of 11.5% (for the 2024–25 year) of ordinary time earnings to each eligible employee's super fund, due quarterly. STP reports the super liability but does not automatically make the payment — that is a separate step. Missing super payments can attract the Superannuation Guarantee Charge (SGC), which adds interest and an administration charge on top of the unpaid super.

Record-keeping obligations for Australian startups come from two different regulatory bodies, each with different timeframes. Per the ATO's record-keeping overview (updated May 2026):

ATO rule — 5 years: Businesses must keep records of all transactions relating to their tax, superannuation, and registration affairs for 5 years from when the record was prepared, obtained, or the transaction was completed — whichever is later. This covers:

• All income and expense documents: invoices, receipts, bank statements
• Records of business decisions, estimates, and calculations
• Payroll records (5 years from the date of super contributions or payroll dates)
• GST-related records supporting input tax credits claimed

ASIC rule — 7 years: Under the Corporations Act 2001, companies (Pty Ltd entities) must keep financial records for 7 years. Founders operating as a Pty Ltd company should apply the longer 7-year rule to all financial records — this automatically satisfies both the ATO and ASIC requirements.

Format requirements: Records must be in English (or easily convertible to English), unaltered, and accessible if the ATO requests them. Digital records are fully acceptable. Cloud-based accounting software automatically maintains compliant records — another strong reason to adopt it from day one.

The R&D Tax Incentive (R&DTI) is one of the most valuable tax benefits available to eligible Australian tech startups. Entities with aggregated turnover under $20 million can access a refundable tax offset on eligible R&D expenditure. To protect any future claim, founders must establish a proper record-keeping discipline before R&D activities begin — not after.

The business.gov.au R&DTI record-keeping guide (updated May 2026) and the ATO's R&D claiming checklist (updated May 2026) require the following:

1. Contemporaneous records — created at the time the activity is conducted, not retrospectively. The ATO will not accept records written up after the fact as evidence of genuine R&D. This is the most common reason claims are rejected.

2. Evidence that the outcome could not be known in advance: Background research confirming there was genuine technical uncertainty at the start of the project.

3. Systematic progression of work: Documentation showing the scientific method was followed — hypothesis → experiment → observation → evaluation → conclusion.

4. Expenditure records: What was spent, how much, who incurred it, when, and which specific R&D activity it relates to. Salary allocations require timesheets or equivalent records.

5. Types of records to maintain from day one: Experimental plans and design documents, test reports and results, sprint retrospectives and engineering decisions, meeting minutes, email threads about technical problems, project management tool exports (Jira, Linear, etc.), expenditure approval requests, and contractor agreements.

Retention: R&D records must be kept for 5 years after claiming the expenditure.

Registration: R&D activities must be registered with the Department of Industry, Science and Resources (DISR) within 10 months of the end of the company's income year — before the offset can be claimed in the company tax return.

Beyond the basics of invoices and bank statements, founders who want clean compliance and the ability to make future R&D claims should track the following from day one:

• Invoice register: All sales invoices issued, with GST treatment clearly coded (taxable, GST-free, or input-taxed). Essential for accurate BAS preparation.
• Expense records: All purchase receipts and invoices, with GST amounts separated. Your accounting software should capture this automatically if you code transactions correctly.
• Bank reconciliation: Reconcile your accounting records to your bank statements at least monthly — ideally weekly. Discrepancies found early are easy to fix; those found at BAS time or year-end are painful.
• Payroll records: Timesheets, pay slips, super contribution records, and STP reports — particularly important for R&D claims where salary costs need to be allocated between eligible R&D activities and non-eligible activities.
• R&D time tracking: If engineers and technical staff are working on potentially eligible R&D, establish a lightweight time-tracking discipline (even a weekly 15-minute team update in a shared doc) to document which activities are being worked on and by whom.
• Project documentation: For R&D specifically — keep experimental plans, sprint notes, architecture decision records (ADRs), and any documentation of technical hypotheses and outcomes in a centrally accessible location.
• Capital expenditure register: If the startup acquires equipment, software licences, or IP — keep records of cost, date of acquisition, and intended use. This is relevant for depreciation claims and any future R&D asset allocations.

The three dominant cloud accounting platforms used by Australian small businesses and startups are Xero, MYOB, and QuickBooks Online. All three support the core compliance requirements for Australian startups:

• GST accounting and BAS preparation and lodgement
• Single Touch Payroll Phase 2 reporting
• Bank feeds and automated bank reconciliation
• Invoicing, expense tracking, and financial reporting
• Integration with third-party apps (payroll, payments, inventory, project management)

Xero has a strong presence among Australian startups and is widely used by accounting firms and bookkeepers, partly due to its open API ecosystem and cloud-first design. It integrates with a large number of third-party tools commonly used by tech startups.

MYOB has deep roots with Australian SMEs and accountants, with a strong local support network. Its AccountRight product is particularly common in traditional business environments.

QuickBooks Online is popular globally and has a growing Australian user base. It may be advantageous if your team has previous QuickBooks experience from other markets.

All three platforms are regularly updated for Australian compliance changes. Founders should trial and compare them — current features, pricing tiers, and integrations change regularly, and the best fit depends on your specific workflow.

Many founders try to handle all their own bookkeeping in the early months — which is fine while transactions are simple and infrequent. But as the business grows, the right professional support at the right time can prevent costly errors and free founders to focus on the business. Here is a practical guide to each role:

Bookkeeper: Handles day-to-day data entry, bank reconciliation, invoice management, payroll processing, and basic BAS preparation. Engage a bookkeeper as soon as the business has regular transactions — typically before the first BAS lodgement is due. A good bookkeeper keeps your records clean, current, and correctly coded, which makes every subsequent compliance step (BAS, year-end, R&D claims) far less painful and expensive.

BAS Agent: A BAS agent is a person registered with the Tax Practitioners Board (TPB) to prepare and lodge BAS on your behalf for a fee. Registration requires at least a Certificate IV in bookkeeping or accounting, a Board-approved GST/BAS course, and 1,400 hours of relevant experience in the past 4 years (or 1,000 hours if a member of a recognised BAS agent association). The individual BAS agent registration fee is $56 (not subject to GST, effective 1 July 2025, indexed by CPI annually). The TPB's BAS agent registration page details all requirements (updated July 2025).

Critical tip: When engaging a bookkeeper to lodge your BAS, verify they are a registered BAS agent via the TPB register at tpb.gov.au. Unregistered persons are legally prohibited from providing BAS services for a fee. An unregistered bookkeeper can prepare your records but cannot lodge the BAS on your behalf. The TPB's qualifications guide (updated September 2025) confirms the requirements.

Accountant / Tax Agent: Handles strategic tax advice, company tax return preparation, year-end financial statements, R&D tax incentive claims, capital raises, and growth structuring. Engage an accountant at least once per year for the annual tax return. Engage earlier for any significant transaction — a capital raise, restructuring, or R&D claim. A startup-specialist accountant will also understand the nuances of franking credits, CGT concessions, and the interaction between founder salaries and dividends.

Work through this checklist in order. Most of these steps are free and take less than a day to complete — but skipping them can be costly.

• ☐ Register for an ABN (free) via business.gov.au before you issue your first invoice. An ABN is required before GST registration, BAS lodgement, and most business interactions.
• ☐ Choose your accounting software — Xero, MYOB, or QuickBooks Online. Set it up on day one. Connect your business bank account via a bank feed for automatic transaction import.
• ☐ Decide on voluntary GST registration: If you have significant pre-revenue expenses (development costs, equipment, software, legal fees) that include GST, voluntary registration may produce an early refund from the ATO. If your customers are B2B, the GST on your invoices is neutral to them. Discuss this decision with your accountant or BAS agent.
• ☐ Register for GST via ATO Online Services for Business once you decide to register (free). Requires your ABN first. Note your registration date — it determines from when you must report GST.
• ☐ Set up correct GST coding in your accounting software: taxable supplies, GST-free supplies, and input-taxed supplies must be coded correctly. Errors here cause BAS mistakes.
• ☐ Diarise your quarterly BAS due dates: 28 October 2025, 28 February 2026, 28 April 2026, and 28 July 2026. Late lodgement attracts penalties.
• ☐ Engage a registered BAS agent or bookkeeper before your first BAS is due. Verify their registration at tpb.gov.au.
• ☐ Set up R&D record-keeping from day one if your startup is building software or conducting technical experiments. Create a shared folder (Google Drive, Notion, Confluence) for experimental plans, test results, sprint notes, and engineering decisions. Record dates, participants, and outcomes contemporaneously.
• ☐ Before hiring your first employee: ensure your accounting software is set up for STP Phase 2 payroll. Register as an employer with the ATO. Confirm the employee's TFN and super fund details before the first payday.
• ☐ Set up a document retention system: all invoices, receipts, bank statements, and contracts must be kept for a minimum of 7 years (ASIC requirement for Pty Ltd companies). Cloud accounting platforms and digital document storage solutions make this automatic.
• ☐ Engage an accountant for your first year-end company tax return. If you may claim the R&D Tax Incentive, engage a specialist R&D accountant at least 3 months before the DISR registration deadline (10 months after your income year ends).
• ☐ Review PAYG instalments: once enrolled by the ATO, check whether the ATO-calculated instalment aligns with your actual income trajectory. Vary it if needed — but document your reasons.

Generally, no — exports of services to customers located outside Australia are typically treated as GST-free (zero-rated) supplies under the Australian GST system. This means you do not charge 10% GST on those invoices, but you can still claim input tax credits on the purchases you make in producing those services. For a SaaS startup with predominantly international customers, this is a significant advantage: you can register for GST, claim back input tax credits on all your Australian expenses, and not have to charge your customers any extra.

However, the rules around exported services are nuanced. The ATO's guide on how Australian GST works covers the treatment of cross-border supplies. For example, services consumed in Australia — even if provided to a foreign customer — may still be taxable. Founders providing digital services to consumers in other countries should also be aware of the GST on digital products rules (the Netflix tax) for foreign suppliers. Seek specialist advice for your specific situation.

Missing a BAS deadline triggers a failure to lodge (FTL) penalty. The penalty is calculated based on a set number of penalty units per 28-day period (or part thereof) that the statement is overdue, multiplied by the size of the entity (small entities attract 1 penalty unit per 28-day period; medium and large entities attract more). Penalty unit amounts are set by the Commonwealth and are periodically updated.

The ATO also charges general interest charge (GIC) on any GST or PAYG amounts owing after the due date — interest accrues daily and compounds.

If you miss a deadline for genuine reasons (illness, natural disaster, or other circumstances outside your control), you can apply to the ATO for remission of penalties and interest by calling 13 28 66 or through your registered tax or BAS agent. The ATO has discretion to remit penalties in appropriate cases, particularly for first-time failures with an otherwise clean lodgement history.

Prevention is simple: Diarise your BAS due dates at the start of each financial year and use accounting software that provides automated reminders. If you use a registered BAS agent, they will typically manage your lodgement calendar on your behalf.

Both are registered with the Tax Practitioners Board (TPB), but they have different scopes of work:

• BAS agent: Registered to provide BAS services — preparing and lodging business activity statements, setting up activity statement obligations, and providing advice on GST, PAYG withholding, and FBT instalment obligations. BAS agents typically have a Certificate IV in bookkeeping or accounting. They are not authorised to provide income tax advice or lodge company tax returns.
• Tax agent: Registered to provide a broader range of tax services, including preparing and lodging income tax returns, advising on tax law generally, and representing clients in dealings with the ATO. Tax agents typically have a degree-level qualification in accounting or a related field plus relevant experience.

For a startup with employees and GST obligations, you will likely need both: a BAS agent (or bookkeeper-BAS agent) for quarterly BAS lodgement and payroll compliance, and a tax agent (accountant) for the annual company tax return, R&D claims, and strategic tax advice. Some practices offer both services through the same firm.

Not automatically — the ability to claim input tax credits depends on the nature of the purchase and how it relates to your taxable supplies. The general rule: you can claim input tax credits for GST you pay on purchases that you acquire solely or partly for a creditable purpose — meaning for use in your business activities that make taxable supplies.

You cannot claim input tax credits for:

• Purchases used to make input-taxed supplies (e.g., if you provide financial services, you can't claim credits on costs directly related to those services).
• Purchases that are private or domestic in nature (personal expenses).
• Purchases where no GST was included in the price (e.g., wages, bank charges, insurance premiums where no GST applies).
• Purchases where the supplier was not registered for GST.

For mixed-use purchases (partly for business, partly private — like a laptop used for both work and personal use), you can only claim the business-use proportion. The ATO's Simpler BAS GST bookkeeping guide provides practical guidance on coding purchases correctly.

Yes — if you are registered for GST, you are generally required to lodge a BAS for every reporting period, even if you had no sales, no expenses, and no GST to report. Lodging a nil BAS is required to confirm to the ATO that you had no activity, and it prevents automatic FTL penalties for non-lodgement.

Lodging a nil BAS is quick — most accounting software platforms allow you to do it in under a minute if all the balances are zero. Alternatively, your registered BAS agent can lodge it on your behalf.

If your startup is in a long pre-revenue phase with genuinely no transactions (e.g., you are a founding team with no registered expenses yet), consider whether you actually need to be registered for GST at that stage. If you voluntarily registered and are now finding the quarterly lodgement burden excessive, you can apply to deregister — but only after the mandatory 12-month minimum registration period has passed.

To claim input tax credits on your BAS, you must hold a valid tax invoice from the supplier for any purchase over $82.50 (including GST). The ATO's Simpler BAS bookkeeping guide sets out the requirements.

A valid tax invoice must include:

• The words "Tax Invoice" (prominently displayed)
• The supplier's identity and ABN
• The date of issue
• A brief description of the items or services supplied
• The GST-inclusive price and the GST amount (or a statement that the price includes GST)

For purchases of $1,000 or more (GST-inclusive), the invoice must also include the buyer's identity or ABN. Most professional suppliers issue compliant tax invoices automatically — but founders using informal suppliers, offshore contractors, or peer-to-peer services should check compliance before claiming credits. The ATO can deny credits and impose penalties if you cannot produce a valid tax invoice on request.

Cash vs accruals for GST: Businesses with aggregated turnover < $10 million may choose cash basis GST accounting — meaning GST is reported when invoices are paid or received, not when issued. Above $10M, accruals (non-cash) accounting is mandatory. The key benefit for startups: you only remit GST to the ATO after your customer has actually paid you. The trade-off: your input tax credits on supplier invoices are also deferred until you pay those invoices. For Simpler BAS (turnover < $10M), reporting is reduced to just three labels: G1 (total sales), 1A (GST on sales), and 1B (GST on purchases). Source: ATO — Choosing a GST accounting method.

PAYG withholding vs PAYG instalments — a critical distinction: Both appear on the one BAS but operate completely differently. PAYG withholding (labels W1/W2) is tax you collect from employees on the ATO's behalf — it is not your money. PAYG instalments (label T7 or T2/T8) are prepayments toward your own business income tax liability, auto-enrolled by the ATO when your instalment income and notional tax reach certain thresholds. For 2025-26, the GDP adjustment rate for PAYG instalment amounts is 4%. Failure to remit PAYG withholding can trigger Director Penalty Notices making directors personally liable. Source: ATO — Starting PAYG instalments.

GST-free exports: Physical goods shipped abroad within 60 days of payment or invoice are GST-free. Services provided to a non-resident client consuming them outside Australia are also GST-free. Critically, you can still claim full input tax credits on your Australian expenses even though your sales are GST-free — making this more commercially attractive than input-taxed status. SaaS startups selling to non-resident business customers who consume the service outside Australia will generally treat those sales as GST-free exports. Source: ATO — GST-free sales.

Input-taxed financial supplies: Financial supplies — lending money, issuing shares, providing credit, dealing in currency — are input-taxed. This means no GST is charged on these supplies but you cannot claim input tax credits on expenses related to making them. Fintechs and financial services startups face a significant GST cost. However, reduced input tax credits (RITCs) of 75% are available for certain outsourced services (accounting, legal, IT, recruitment) related to financial supplies. Source: ATO — Input-taxed sales.

The “Netflix tax” on imported digital services: Since 1 July 2017, Australian GST (10%) applies to imported digital products and services sold to Australian consumers by non-resident suppliers. This covers streaming video, music, e-books, online games, SaaS products, webinars, and online courses. Non-resident businesses above the $75,000 GST threshold must register and remit Australian GST. Electronic distribution platforms such as the Apple App Store and Google Play are responsible for GST where they are the seller of record. B2B exemption: Non-resident suppliers do not charge GST on supplies to Australian GST-registered businesses that acquire the supply for their enterprise — but Australian businesses may face a reverse charge obligation if they cannot claim full input tax credits. Source: ATO — GST on imported services and digital products.

BAS agent extended lodgement deadlines: A registered BAS agent (registered with the Tax Practitioners Board) can extend your quarterly BAS lodgement deadlines significantly:

Your business must be on the agent's client list before the standard due date to qualify. Verify your BAS agent is registered at tpb.gov.au. Source: Aone Outsourcing — Understanding BAS agents.

Recommended bookkeeping platforms: The leading cloud accounting platforms for Australian startups are Xero (most popular among Australian accountants and bookkeepers, strong integration ecosystem), MYOB (long-established Australian product, widely used by accountants, strong payroll), and QuickBooks Online (popular globally, robust inventory and payroll). All three are fully STP Phase 2 compliant. Under STP Phase 2, the ATO receives disaggregated payroll data every single pay run — meaning any gap between your STP reporting and BAS payment is flagged automatically.

Fuel tax credits: Businesses that use diesel or petrol in machinery, plant, equipment, or heavy vehicles (>4.5 tonnes GVM) can claim a credit for the fuel excise included in the purchase price. Must be GST-registered to claim; credits are lodged on the BAS. For 2025-26 (1 July 2025 – 3 August 2025 tranche), liquid fuels in heavy vehicles on public roads attract 18.4 c/litre; all other business uses attract 50.8 c/litre. Rates are indexed to CPI twice yearly. Source: ATO — Fuel tax credit rates 2025-26.

Instant asset write-off — $20,000 confirmed for 2025-26: The $20,000 instant asset write-off for small businesses is now law for the full 2025-26 financial year (1 July 2025 – 30 June 2026). Eligibility: small businesses with aggregated turnover < $10 million that apply the simplified depreciation rules. Applies per asset — multiple assets can each be written off in full if each costs less than $20,000 (excluding GST for registered businesses). Assets costing $20,000 or more must be placed into the simplified depreciation pool (15% first year, 30% thereafter). Pool balances below $20,000 at year-end can also be written off entirely. Source: ATO — Instant asset write-off.

⚠️ Proposed (not yet law): The 2026-27 Budget (May 2026) proposed making the $20,000 instant asset write-off permanent from 1 July 2026. This is not yet enacted. Startups should plan on the basis of the confirmed 2025-26 position only and monitor legislation. Source: ATO — Small Business Support: $20,000 write-off; Nexia Australia — $20,000 write-off extension.

Payday Super (from 1 July 2026): ⚠️ From 1 July 2026, super contributions will need to be paid on the same day as wages, replacing the current quarterly requirement. This is a significant change for startups with payroll — your payroll system and cash flow management must be ready before this date. Ensure your bookkeeping platform (Xero, MYOB, or QuickBooks) has been updated to handle same-day super payments.

These hand-picked videos and podcast episodes go deeper on the topics in this guide. We've favoured Australian creators, advisers and founders, with a few standout global explainers where the concept is universal. Each link was checked to confirm it is live at the time of publishing; treat any figures, tax rates or thresholds mentioned in older clips as point-in-time and cross-check against the current rules above.

Watch

• How to Lodge Your Business Activity Statements (BAS) with Xero — Davie Mach (2025). Step-by-step walkthrough of lodging a BAS in Xero from Davie Mach (CA ANZ-qualified accountant); covers GST reporting, common mistakes, and the ATO lodgement process — highly practical for AU startup founders doing their own BAS.
• Preparing BAS in Xero - Part 1 — Tall Books (2021). Hands-on AU walkthrough of preparing a BAS in Xero, from financial settings to GST coding.
• Set up your accounting the right way — Rask (2025). Australian Business Podcast episode with Grey Space Advisory covering 101 accounting tips for AU small businesses including a dedicated GST & BAS chapter (15:38), superannuation, cash vs accrual methods — ideal starting-point for founders setting up books.

Listen

• Let's talk GST — Straight Up Small Business (2022). AU-focused bookkeeper Bec Buchanan (Straight Up Bookkeeping) explains GST registration threshold, when to register, claiming GST on expenses, tax invoices, and top-3 GST tips — clear primer for AU startup founders.
• Activity Statements explained — Straight Up Small Business (2023). Short explainer episode on what BAS and IAS are, when they are due, lodgement methods, and how reporting obligations differ by turnover and GST registration status — essential context for AU startup founders.