Including wages and superannuation contributions as purchases at G11
You must report wages at W1. You don’t need to report superannuation contributions..
Lodging blank forms.
When lodging statements with nothing to report at any label (a nil statement), insert zeros against labels 1a, 1b and 9.
Lodging printed activity statements
You must lodge original activity statements with the Australian Taxation Office (ATO)
Not registering with the ATO for tax obligations reported in your activity statement.
It is important to ensure that you are correctly registered for all your tax obligations. To register or cancel registration for PAYG withholding, goods and services tax, luxury car tax or wine equalisation tax, contact us on 13 28 66.
Not notifying us of the accounting method used.
If you are new to business reporting, notify us on 13 28 66.
Using the Incorrect accounting method.
If you are using the cash accounting method and your business turnover is expected to exceed $1 million, you must change to the accrual accounting method and notify us on 13 28 66. We will consider requests for continued use of the cash accounting method. However, approval is dependent on circumstances.
Not including cash taken from the till to pay for purchases.
Total sales (G1 on your BAS) should include all cash payments made out of the till for purchases.
Including dollars and cents.
Show only whole dollars when completing your activity statement. To avoid processing errors and to allow us to issue any refund quickly, do not use cents, decimal points, commas, symbols or words such as $, nil and n/a.
Not lodging your activity statement by the due date
You must lodge your activity statement and pay any amounts owing by the due date. The only time you don’t have to lodge is if you receive an instalment notice (they have the letter N, R, S or T in the top left-hand corner) and pay the pre-printed instalment amount by the due date.
Being unsure about when to leave boxes blank and when to report a zero in a box
Generally, leave boxes blank if they do not apply to your business. For example, if you do not have exports to report, leave the box at G2 blank. However, you should write a zero (0) if you are:
Signing your activity statement
Needing to lodge an activity statement if you have nothing to report
Even if you have nothing to report, we must receive your completed activity statement by the due date, unless otherwise directed on the form. If you have nil activity to report, you may be eligible to use our nil lodgment automated phone service. Refer to How to lodge your activity statement for more information.
Not knowing how to make payments at Australia Post
Refer to How to pay – Australia Post for more information.
Lodging your activity statement late
Penalties now apply automatically for late lodged activity statements at a rate of $170 every 28 days or part thereof (to a maximum of $850). Higher rates will apply to medium or large taxpayers.
Talking to someone on the phone
When phoning us, ensure you have your tax file number ready. If you’re phoning on behalf of someone, you must be the authorised contact person.
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Overlooking boxes, such as 1A (GST sales or GST instalment) and 5A (PAYG income tax instalment)
You must complete 1A if you’re reporting a GST obligation and 5A if you’re reporting a PAYG obligation (even when your instalment amount is zero).
Not correctly reporting all amounts at G1
You must include all payments and other consideration you have received during the quarter for sales you have made in the course of your business. This includes amounts you have shown at:
Reporting the wrong amounts at G1
Do not report the following amounts at G1:
Completing G2 (Export sales) incorrectly (for example, treating supplies as exports when the goods are consumed within Australia)
You should only report the following at G2:
Incorrectly claiming GST credits on the total price of a car that exceeds the car limit
To correctly claim, the following applies:
Incorrectly claiming GST credits
You cannot claim:
Not recording the sale of business assets.
The sale price of business assets, that are not input taxed or GST-free are taxable and must be reported at G1 and 1A.
Not including the sale of a business.
The following applies:
Not providing your estimated net GST for the year when requesting a variation to your GST instalment amount
When varying GST instalments, you must provide an estimated annual net GST amount in G22.
Notifying a variation to your GST or PAYG Instalment after the due date for the instalment to be paid.
By law, you must notify us of your variations by the date the instalment is due to be paid.
Claiming GST credits for the full amount of a purchase when the goods are to be used partially or wholly for private purposes
You can only claim GST credits on the proportion of the expense used for business.
Being unaware that you are subject to an increasing adjustment at G1 on your previous activity statement for assets disposed of
Claiming GST credits where the contractor or supplier is not registered or required to be registered for GST.
You cannot claim GST credits where the contractor or supplier of the goods or services is not registered or required to be registered for GST as no GST is included in the price.
Changing the legal structure of your business entity and continuing to lodge activity statements under the ABN of the old entity.
If you change the legal structure of the entity used to carry on your business, you cannot continue lodging your activity statements under the same ABN. You need to apply for a new ABN and register the new entity for GST if that entity is required to be registered for GST, or chooses to register for GST. Examples of changes in legal structure include:
Not explaining your variations or providing a variation code
When you vary a GST or PAYG instalment amount, you must also say why you made the variation at label G24 (for GST) or label T4 (for PAYG). The reason for varying codes are:
If you vary your PAYG instalment amount or rate, or your GST amount, you must show one of the following reason codes at label T4 (for PAYG instalments) or label G24 (for GST) on your activity statement:
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When reporting PAYG tax withheld the amount at W5 (total of amounts withheld), incorrectly including the amount at W1 (total salary, wages and other payments)
If you’re required to report PAYG tax withheld, only add amounts at
When you’re offered options for your PAYG obligation, completing boxes for more than one option
Complete the boxes for one option only.
Not recording the amount of PAYG withholding at label 4 in the summary
Label 4 in the summary of the activity statement should always equal the total of the amounts at labels.
Completing label 4, or one of the W labels, even though you’re not registered for PAYG withholding
If you pay salary and wages and you’re not registered for PAYG withholding, you can register using the portal by referring to ‘Business registration details’:
Reporting total salary, wages and other payments (W1), but not reporting amounts withheld from these payments (W2)
Amounts withheld from salary, wages and other payments must be reported at W2 (unless you are a Large PAYG remitter).
Not reporting amounts withheld from payments when an ABN has not been quoted (W4)
If an ABN has not been quoted, you must report amounts withheld from payments at label W4.
Overlooking boxes such as 1A (GST sales or GST instalment) and 5A (PAYG income tax instalment), which means we need to contact you
You must complete 1A if you’re reporting a GST obligation and 5A if you’re reporting a PAYG obligation (even when your instalment amount is zero)
Incorrect recording of instalment income at T1
You must include all your earnings in your instalment income. This includes amounts that are paid by direct credit to your bank account and all cash (even if it has not been banked or was used to pay expenses). You must also account for your non-cash transactions (for example, those resulting from bartering) in your instalment income.
Not providing your estimated tax for the year when requesting a variation to your PAYG instalment amount
If you use Option 1 and vary your PAYG instalment for the quarter, ensure you complete T8 and T9. We use your estimated tax at T8 to work out your instalments for the remaining quarters of the income year.
Having a PAYG instalment obligation but not calculating the amount at 5A correctly
Your PAYG instalment amount at 5A must equal either:
Not explaining your variations or providing a variation code
when you vary a GST or PAYG instalment amount, you must also say why you made the variation at label G24 (for GST) or label T4 (for PAYG). The reason for varying codes are
The PAYG tax withheld amount at 4 not equalling the sum of amounts at W2, W3 and W4
Calculate the PAYG tax withheld amount at 4 by adding the amounts at W2 + W3 + W4.
Notifying a variation to your GST or PAYG Instalment after the due date for the instalment to be paid
Not showing any PAYG instalment income at label T1
If you report your PAYG instalment amount using the income x rate method (option 2) and your income for the period is zero, write ‘0’ at label T1.
Not including interest and dividend income at T1
If you calculate your own PAYG instalment on your activity statement (that is, you use option 2, instalment income x instalment rate) then include at label T1 any interest received or credited to your bank account, and dividends paid or re-invested on your behalf (don’t include franking credits). Our publications You and your shares and PAYG Instalments – How to complete your activity statement contain more detailed information. For more information, refer to Activity statements or phone 13 28 66.
Indicating that you want to vary your PAYG instalment amount but not completing all the relevant PAYG variation labels
Complete all relevant PAYG variation labels, for example, if varying the:
Reporting net income at Label T1
You must report total gross income (excluding GST) at label T1. Refer to PAYG instalments – how to complete your activity statement.
Not reporting instalment income at label T1 but reporting total sales at label G
Generally, the presence of sales for GST purposes means that there must be at least that amount of instalment income reported at T1. Instalment income reported at T1 also includes other income such as dividends and interest.
Not reporting instalment income at label T1 when T1 is zero
T1 must be completed if it is zero when the Commissioner rate (T2) is used for reporting instalment income
Adjusting the T1 figure to reflect a change in expected tax liability
Commissioner rate (T2) should be varied using T3 to reflect a change in expected tax liability.
Individuals lodging a quarterly PAYG I activity statement not including their income from partnerships and trusts as instalment income at label T1 on a quarterly basis
Individuals who lodge a quarterly PAYG I activity statement must include their share of income from partnerships and trusts as instalment income at label T1 each quarter.
Calculating label 5A incorrectly
Label 5A must equal either:
Lodging activity statements after your FBT return
If you pay fringe benefits tax (FBT) by instalments, make sure you lodge all your activity statements for the FBT year ending 31 March before you lodge your FBT return. This includes the March quarter activity statement due on 28 April. This will allow us to update your FBT account and process your return quickly.
Claiming GST input tax credits on the full amount of the meal entertainment benefits
only claim input tax credits on benefits that you pay FBT on. For example, using the 50/50 method you only claim 50% of the total input tax credits.
Not including FBT on private use of business assets (especially for cars and computers)
FBT obligations for private use of business assets must be reported in your FBT return.
If you have any feedback on the activity statement, phone us on 13 28 66.
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can rely on, so we make every effort to ensure that what we give
you is correct.
If you follow our advice or guidance and it turns out to be
incorrect, or it is misleading and you make a mistake as a
result, we will take that into account when determining what
action, if any, we should take.
Some of the advice and guidance on this website applies to a
specific financial year. This is clearly marked. Make sure you
have the information for the right year before making decisions
based on that information.
If you feel that our advice and guidance does not fully cover
your circumstances, or you are unsure how it applies to you,
contact us or seek professional advice.
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