Difference between IAS and BAS

There is often confusion around the difference between IAS and BAS

Some businesses file business activity statements (BAS) quarterly others file installment activity statements (IAS) monthly, some file a combination of both. Businesses even have different elements to report on their IAS depending on their size and circumstances. Below are summaries outlining the functions and purposes of BAS and IAS reports.

What is a BAS `Business Activity Statement’?

A BAS is form used to report and pay a business’s GST and PAYG withholding liabilities for the period. It will also include PAYG income tax installments and fringe benefits tax installments where necessary. This allows businesses to pay accrued liabilities throughout the year instead of incurring large expenses all at once at the end of the financial year.

BAS reports are due every quarter if your business has a GST turnover of less than $20 million a year and monthly if turnover is more than $20 million

What is an IAS `Instalment Activity Statement’?

An IAS is like a BAS for entities that are not registered for GST. It is used to report and pay PAYG withholdings from employees, PAYG income tax installments and fringe benefits tax instalments if necessary. IAS reporting may also be necessary for businesses who are registered for GST but because they are considered medium withholders (withholding more than $25,000 pa) they are required to remit PAYG withholding monthly on an IAS along with their quarterly BAS obligations.

The most common types of IAS are: IAS I which reports PAYG withheld only and IAS J which reports PAYG withheld, PAYG income installment and FBT installment.

What size withholder are you?

Small – Withholds $25,000 or less each year – Reports and pays PAYG on IAS quarterly.

Medium – Withholds more than $25,000 each year – Reports and pays PAYG on IAS monthly.

Large – Withholds more than $1 million each year – Reports and pays PAYG electronically twice a week.

Do you still need to report PAYG withheld and gross wages on BAS / IAS since you now do it through single touch payroll?

Yes, even though your gross wages and withholdings are electronically submitted through STP this does not eliminate the need to report these figures as usual on your BAS or IAS. In some cases, you can set up your accounting system to automatically populate the fields W1-gross wages and W2-tax withheld with STP data, eliminating room for error and keeping the process efficient.

Do you need help with IAS or BAS reporting?

For a full range of BAS and IAS compliance services visit CTK ACCOUNTING at ctkaccounting.com.au

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