Xero BAS report: run the activity statement and know what you will owe

Short answer: the BAS report in Xero is the Activity Statement, in the Tax menu (in Xero’s older menu, search for it under Accounting › Reports). It fills in your Business Activity Statement from what is coded in Xero: total sales (G1), GST on sales (1A), GST on purchases (1B) and, if you run payroll in Xero, wages (W1) and the tax withheld from them (W2). Check it against the GST Reconciliation report and your bank before you lodge, because the BAS is only as right as the tax codes on each transaction. Then look at the total: GST and PAYG withheld were never the business’s money, so a quarter’s BAS often takes a large slice of the bank balance in one payment. In the worked example below, a business with $22,000 in the bank owes $14,800 on its BAS, which leaves $7,200.

Which Xero reports you need for a BAS

Report	What it gives you	Use it to
Activity Statement	The BAS fields for the period: G1, 1A, 1B, W1, W2 and the instalment boxes	See what you will lodge and pay; lodge from Xero if it is connected to the ATO
GST Reconciliation	GST on the activity statement against the GST account and the transactions behind it	Catch transactions coded after a BAS was finalised, and differences between the report and the account
Balance Sheet	The GST and PAYG withholding liability accounts at the end of the quarter	Check that what Xero says you owe matches the BAS
Account Transactions (GST account)	Every line that moved the GST account	Find the transaction behind a difference
Payroll Activity Summary	Wages and tax withheld for the period	Check W1 and W2 if payroll is in Xero (Xero payroll reports)

Most small businesses with turnover under $10 million use Simpler BAS, which only asks for G1, 1A and 1B for GST. Full BAS also asks for export sales (G2), other GST-free sales (G3), capital purchases (G10) and other purchases (G11). You choose the method in the Activity Statement settings, and it should match what the ATO has you registered for.

A worked quarter: a landscaping business in Newcastle

These figures are made up. Sam’s landscaping company is registered for GST on the accruals basis, lodges quarterly and uses Simpler BAS. This is the July to September 2026 quarter, due on 28 October 2026 (tax and BAS agents can often lodge later).

BAS field	What it is	$
G1 Total sales	Sales invoiced in the quarter, including GST	132,000
1A GST on sales	132,000 ÷ 11	12,000
1B GST on purchases	GST on 55,000 of purchases with GST, including GST (55,000 ÷ 11)	(5,000)
Net GST	1A less 1B	7,000
W1 Total salary and wages	Gross wages for the quarter	30,000
W2 Amounts withheld	Tax withheld from those wages (paid to the ATO, not to staff)	4,800
5A PAYG income tax instalment	The amount on the ATO’s instalment notice	3,000
Total payable to the ATO	7,000 + 4,800 + 3,000	14,800

Brackets are minus figures. Super is left out to keep the example short. The 5A figure is a fixed amount here (option 1); PAYG instalments explains how the ATO sets it and when the rate option (option 2) suits better.

On 30 September the business has $22,000 in the bank. The quarter made a profit, and the dashboard looks fine, but $14,800 of that balance belongs to the ATO by 28 October. What Sam can actually spend is $7,200, before the next payroll and any bills already due. Setting aside 1 dollar in 11 of every sale as it is paid, plus the tax withheld from each pay run, would have built the $14,800 up in about $1,138 a week over the 13 weeks.

Cash or accruals: the same quarter both ways

At 30 September, $20,000 of the quarter’s invoices (including GST) are still unpaid.

GST basis	GST on sales (1A)	Net GST	Total BAS
Accruals: GST is due when you invoice	12,000	7,000	14,800
Cash: GST is due when the customer pays	12,000 − 1,818 = 10,182	5,182	12,982

On the accruals basis Sam pays about $1,818 of GST on invoices customers have not paid yet. If one of them is never paid, the GST can be claimed back once it is written off or 12 months overdue (writing off a bad debt in Xero). On the cash basis that GST moves to the quarter the money arrives in (this example assumes every purchase was paid in the quarter, so 1B is the same both ways). Only businesses under the ATO’s turnover limit can choose the cash basis, and the setting in Xero’s financial settings must match your ATO registration; ask your accountant or BAS agent before changing it. The cash vs accrual reports guide explains how the same choice changes your Profit and Loss.

How to run the BAS report in Xero

1. Reconcile every bank account and credit card to the last day of the quarter. Unreconciled lines are not in the BAS yet, and a missing purchase means GST you could have claimed back.
2. Open Activity Statement from the Tax menu (older menu: Accounting › Reports, then search for it). Choose the period, check the settings (GST basis, Simpler or Full BAS, PAYG instalment option) and review each field. Click a figure to see the transactions behind it.
3. Run the GST Reconciliation report for the same period. Differences usually mean a transaction dated in an earlier, already finalised period was added or changed.
4. Compare the Balance Sheet at the quarter end: the GST account should match net GST owing, and PAYG withholding should match W2 (if there is nothing older still unpaid).
5. Lodge from Xero if your organisation is connected to the ATO, or send it to your BAS agent. Once lodged, finalise the statement in Xero so later changes show up as differences instead of quietly changing a lodged figure.
6. Pay it, or plan for it. Record the payment when it leaves the bank, against the GST and PAYG accounts, so the Balance Sheet goes back to zero for that quarter. If the cash is not there, lodge on time anyway and ask the ATO for a payment plan before the due date (what to do if you can’t pay your BAS on time).

Menu names and steps differ a little by Xero plan and change between releases; search Xero Central for “Activity Statement” if your screen does not match. In the UK the same job is the VAT return: see Xero VAT return: what each box means. In New Zealand it is the GST return: see Xero GST return (NZ).

Common mistakes

• Wrong tax codes. Bank fees, wages, super, loan repayments and owner transfers carry no GST. Coding them with GST claims GST you never paid. Most of a BAS check is looking down the 1B list for these.
• Claiming GST without a tax invoice, or on purchases with no GST in them (many overseas subscriptions, some insurance components).
• Personal spending run through the business account and coded as business purchases.
• Treating the bank balance as spendable in the weeks before the BAS is due. The GST in it belongs to the ATO, and so does the company or income tax building up on your profit (how much to set aside for tax works out one percentage for all of it).
• Changing figures in a lodged quarter. Fix errors in the next BAS (within the ATO’s limits) or ask your BAS agent; do not quietly edit a period that has already been lodged.
• Leaving it to the week it is due. A monthly look at the GST account on the Balance Sheet makes the quarterly total a number you saw coming.

Common questions

Where is the BAS report in Xero? It is the Activity Statement, in the Tax menu. If your Xero still shows the older menu, go to Accounting, then Reports, and search for Activity Statement. It shows the BAS fields for the period you choose and the transactions behind each one.

How do I check my BAS is right in Xero? Reconcile every bank account to the quarter end, review the Activity Statement field by field, then run the GST Reconciliation report and compare the GST and PAYG withholding accounts on the Balance Sheet. Look through the GST on purchases list for items that should carry no GST, such as bank fees, wages and loan repayments.

What is the difference between Simpler BAS and Full BAS? Simpler BAS asks only for total sales, GST on sales and GST on purchases. Full BAS also asks for export sales, other GST-free sales, capital purchases and other purchases. Most small businesses with turnover under 10 million dollars can use Simpler BAS.

Can I lodge my BAS from Xero? Yes, once your organisation is connected to the ATO in Xero you can lodge the activity statement from Xero. Many businesses have a registered BAS or tax agent lodge it instead, which can also give later due dates.

Why is my GST different on a cash basis? On the cash basis, GST is reported when money is received or paid, not when invoices are raised. Unpaid sales invoices at the quarter end leave the GST on them out until the customer pays, so the BAS is lower that quarter and higher in the quarter the money arrives.

When do I have to register for GST and start lodging a BAS? Once your GST turnover reaches 75,000 dollars over the past 12 months or the next 12, and you then have 21 days. The GST threshold guide works an example through, including the cost of registering late.

How much should I set aside for my BAS? One dollar in every eleven of GST-inclusive sales, less one in eleven of GST-inclusive purchases, plus the tax withheld from each pay run and your PAYG instalment. In the example above that is 14,800 dollars for the quarter, or about 1,138 dollars a week.

See the BAS coming in your Monday email

ReportPilot reads your Xero figures and sends a short plain-English email every Monday. It covers sales and profit against last month and the same month last year, the cash in the bank against the end of last month, money owed to you that is past due and by whom, and bills due in the next two weeks against your cash. It does not prepare or lodge a BAS. It asks Xero for read-only access, and there is a 14-day free trial with no card.