BAS & IAS: Understanding the Difference

There is often confusion around the difference between BAS and IAS. While both are used to report and pay tax obligations to the ATO, they apply in different circumstances depending on your business structure, GST registration, and withholding obligations.

Some businesses lodge Business Activity Statements (BAS) quarterly, others lodge Instalment Activity Statements (IAS) monthly, and some are required to lodge both.

What is a BAS (Business Activity Statement)?

A Business Activity Statement (BAS) is used by businesses registered for GST to report and pay a range of tax obligations.

These can include:

• GST on sales and purchases

• PAYG withholding (tax withheld from employee wages)

• PAYG income tax instalments

• Fringe Benefits Tax (FBT) installments

• Fuel tax credits (if applicable)

BAS lodgement frequency

• Quarterly if your GST turnover is less than $20 million

• Monthly if your GST turnover is $20 million or more

What is an IAS (Installment Activity Statement)?

An Instalment Activity Statement (IAS) is used to report and pay specific tax obligations, generally when GST is not involved or when additional reporting is required between BAS periods.

An IAS typically includes:

• PAYG withholding

• PAYG income tax instalments

• Fringe Benefits Tax (FBT) instalments (if required)

IAS is commonly used by:

• Businesses not registered for GST

• Freelancers and contractors earning under the GST threshold

• Employers who need to report PAYG withholding

• Businesses required to pay PAYG instalments

IAS lodgement frequency

Your PAYG withholding reporting frequency depends on how much tax you withhold annually:

• Small withholder – $25,000 or less per year → report quarterly

• Medium withholder – more than $25,000 per year → report monthly

• Large withholder – more than $1 million per year → report electronically twice weekly

Why Some Businesses Lodge Both BAS and IAS

Some businesses are required to lodge both BAS and IAS.

This usually applies when a business:

• Is registered for GST (and lodges BAS), and

• Has PAYG withholding obligations of more than $25,000 per year

These businesses are considered medium withholders and must:

• Lodge BAS quarterly for GST and other obligations

• Lodge IAS monthly to report and pay PAYG withholding

Do You Still Need to Report PAYG if You Use STP?

Yes.

Even though Single Touch Payroll (STP) reports wages and PAYG withholding to the ATO in real time, you are still required to report these figures on your BAS or IAS.

BAS and IAS both play important roles in meeting your tax obligations, but they are used in different situations.

In simple terms:

• BAS is used by businesses registered for GST to report GST, along with other tax obligations such as PAYG withholding and PAYG instalments

• IAS is used to report PAYG withholding and/or PAYG instalments when GST is not being reported on that form, or when these obligations need to be reported more frequently than BAS lodgements

Some businesses will only need one, while others may need both depending on their size and obligations.

Understanding which applies to your business ensures you stay compliant, avoid penalties, and keep your finances under control.

If you’re unsure what applies to you or want help managing your reporting, getting professional support can save you time, stress, and costly mistakes.

Contact Jess for Support