Quick answer
A BAS set-aside plan moves the tax portion of each week's takings into a separate account, so the money is there when BAS is due. Each week, estimate GST collected minus GST on purchases, add PAYG withheld from wages and a share of any PAYG instalment, and transfer that amount. Quarterly BAS is due 28 October, 28 February, 28 April and 28 July.
Key points
- The GST you collect and the PAYG you withhold were never really the business's money.
- A separate tax account, topped up weekly, removes most BAS stress.
- Estimate conservatively; a small surplus at BAS time is better than a shortfall.
- If you're already behind, lodge on time and talk to the ATO before anything else.
Why does BAS keep catching you out?
Because the money arrives mixed in with everything else. When a customer pays you, the GST on that sale lands in the same account as the rest of the payment. When you run payroll, the PAYG you withhold from wages stays in the account until BAS is due. For weeks, that money looks like working capital. It gets spent on stock, rent and wages. Then the quarter ends and the bill arrives for cash that’s already gone.
It’s especially painful in a growth quarter. Higher sales mean more GST collected, and new staff mean more PAYG withheld, so the bill is biggest exactly when cash is stretched by growth.
A set-aside plan fixes this by moving the tax money out of reach every week, while it’s still there.
When is BAS due?
The ATO’s quarterly due dates are:
| Quarter | Due date |
|---|---|
| July to September | 28 October |
| October to December | 28 February |
| January to March | 28 April |
| April to June | 28 July |
Businesses on monthly BAS (required once GST turnover reaches $20 million, or if the ATO directs it) lodge and pay by the 21st of the following month. If you use a registered tax or BAS agent, different dates may apply. And if you’re not yet registered for GST, remember the ATO requires registration once GST turnover reaches $75,000.
What goes into the weekly set-aside?
For most small businesses, the weekly amount has three parts:
- Net GST: GST collected on sales, minus GST credits on eligible business purchases. For taxable sales that include GST, the GST component is one-eleventh of the GST-inclusive price.
- PAYG withholding: the tax withheld from employees’ wages that week.
- PAYG instalments (if you pay them): a weekly share of the quarterly instalment.
Super used to be a quarterly lump too, but from 1 July 2026 the ATO’s payday super rules require contributions to be received by the fund within 7 business days after payday. Budget super as part of each pay run rather than the BAS set-aside.
How do you work out the number each week?
There are two practical methods. Pick the one that suits how you keep your books.
Method A: from your accounting software. If your software tracks GST and payroll, check the running GST and PAYG withholding balances each week and transfer the increase since last week. It’s the most accurate method and takes a couple of minutes.
Method B: a simple estimate. If your books are updated less often, use a percentage of each week’s deposits based on last quarter:
- Take last quarter’s total BAS (GST, PAYG withholding and instalments).
- Divide it by last quarter’s total business deposits.
- Apply that fraction to each week’s deposits and transfer the result.
- Round up slightly. A small surplus at the end of the quarter is harmless.
Recalculate the fraction each quarter, since growth, new staff or changes in your costs will shift it.
A worked example (illustrative)
Imagine a hypothetical sole-trader landscaper, registered for GST, with one employee.
- Last quarter’s BAS came to $13,200: net GST of $8,400, PAYG withholding of $3,300 and a PAYG instalment of $1,500.
- Last quarter’s business deposits totalled $118,000.
- $13,200 ÷ $118,000 is roughly 0.112, so about 11.2 cents of every dollar deposited belonged to the tax office.
This week, $9,600 was deposited. The owner transfers $1,080 (rounded up from about $1,075) to the tax account. Over a thirteen-week quarter at similar levels, the account holds enough to pay the next BAS on the due date, plus a small cushion.
That routine takes five minutes a week. The difference it makes at the end of the quarter is enormous.
How do you set it up?
- Open a separate account at the same bank as your business account, so transfers are instant.
- Name it clearly: “Tax: do not touch”.
- Choose a weekly day, ideally the day after your biggest deposits land.
- Automate if you can. A scheduled transfer of a fixed amount, adjusted quarterly, works for businesses with steady income.
- Reconcile at BAS time. If there’s a surplus, leave it as next quarter’s buffer. If there’s a shortfall, increase the weekly amount.
If you’re GST-registered and turnover is climbing, review the fraction mid-quarter too. Growth quarters are exactly when the old percentage becomes too low.
What if you’re already behind?
A set-aside plan fixes the future. It doesn’t pay last quarter’s bill. If you’re already short:
- Lodge on time anyway. The ATO’s advice is to lodge even if you can’t pay and to contact it early.
- Consider an ATO payment plan. Balances of up to $200,000 can often be put on a plan online without phoning. Interest charges continue to accrue, and the ATO confirms they’re not tax-deductible when incurred on or after 1 July 2025.
- Compare with a short facility. A short-term loan or line of credit sized on turnover may cost less than months of ATO interest, especially if a known payment is coming. Our page on BAS and tax bills compares the options.
- Start the set-aside immediately, even if it’s small, so next quarter doesn’t repeat the problem.
If you’d like a specialist to compare those options against your figures, start a quick enquiry.
How does this help with borrowing later?
Lenders read your bank statements closely, especially without property. A business that pays BAS on time from a separate tax account shows:
- regular, predictable ATO payments rather than sudden shortfalls;
- no ATO debt sitting on the file;
- an owner who plans ahead.
Our page on ATO debt explains how lenders view tax arrears, and why a lodged BAS with a plan reads far better than silence. Having a set-aside habit in place is one of the simplest ways to look like a stronger borrower.
What about seasonal and project businesses?
If deposits swing sharply, set aside a fraction of each deposit rather than a fixed weekly amount. In busy weeks, you’ll transfer more; in quiet weeks, less. The quarterly BAS reflects the same swings, so the set-aside moves in step.
Project businesses paid in large milestones should transfer the tax portion of each progress payment the day it arrives. A large deposit that includes GST can make the account look flush when a big part of it already belongs to the ATO.
Where does a line of credit fit?
Even with a good set-aside routine, timing can bite: a big customer pays a week after BAS is due, or a quarter includes unusual one-off purchases. A small line of credit can cover those short gaps. The key word is short. If you’re drawing on it every quarter to pay BAS, the set-aside percentage needs lifting.
What are the most common set-aside mistakes?
A set-aside routine is simple, but a few habits undermine it:
- Using last year’s percentage in a growth year. More sales and more staff push the fraction up. Recalculate each quarter.
- Dipping into the tax account “just this once”. It rarely stays once. If you need to borrow from it, you need a different tool, such as a small line of credit, and a plan to repay it before BAS is due.
- Forgetting PAYG instalments. They’re easy to overlook if your accountant set them up and you rarely see the notice.
- Setting aside on gross takings but ignoring refunds. Big refund weeks reduce the GST you owe; reconcile at quarter-end.
- Treating a surplus as spending money. Leave it as next quarter’s buffer, at least until the routine has run smoothly for a year.
Fixing these usually takes one conversation with your bookkeeper and a calendar reminder.
Turn BAS into a non-event
The best BAS is one you’ve already paid for, week by week. If a bill has caught you short this quarter, we can help you look at the options while you set up the routine for next time.
We don’t check your credit when you first enquire. Your enquiry isn’t shared with a crowd of lenders; one specialist reads it and talks it through with you. Please enter accurate figures for the BAS amount and your turnover on the form so the comparison we give you reflects your actual quarter. See what’s possible.
Frequently asked questions
How much of my sales should I set aside for GST?
For taxable sales that include GST, the GST component is one-eleventh of the GST-inclusive price. Your net GST is that amount minus GST credits on eligible purchases. Your accountant or accounting software can give you a more precise weekly figure.
Should income tax be included in the set-aside?
If you pay PAYG instalments, include a weekly share of the instalment. It's also wise for sole traders and partnerships to set aside for end-of-year income tax separately. Your accountant can suggest an amount.
What about super under payday super?
From 1 July 2026, super is paid with each pay cycle, so it no longer needs a quarterly set-aside. Budget it as part of each pay run instead.
Which bank account should I use?
A separate account with the same bank as your business account makes weekly transfers quick. Some owners prefer an account that isn't linked to a debit card, to reduce temptation.
What if my set-aside account runs short?
Lodge on time anyway, contact the ATO about a payment plan, and consider whether a short-term facility makes sense. Then increase the weekly set-aside.