How To Record BAS Payments in Xero

Image By Scott Graham

Published March 2019


Recording your BAS payments in Xero is easy once you've seen it done, this brief article shows you how step by step.

As you record your income and expenses in Xero, the GST portion of the transaction gets allocated to your GST ledger account. At the end of each BAS period you need to record an entry to clear out the GST that has accumulated in that account. It's important to do this because it allows you or your accountant to confirm that all of your GST has been reported to the ATO correctly.

If you have a bookkeeper or accountant preparing your BAS statements then they will (probably) do this step for you. If you're doing it yourself then for many small business owners, this is the most complex thing you'll need to record in xero. The good news is that it's fairly straight forward once you know how.

Step 1 - Take a Look at your BAS

Take a look at your finalised BAS and note the amounts that comprise the amount payable. This will include GST collected at 1A, GST paid at 1B, as well as your Fuel Tax Credits and Pay As You Go Withholding if thats applicable to you.

As an example, lets say these amounts look like this:

Description Label Amount
GST Collected 1A $ 5,000
GST Paid 1B - $ 1,000
PAYG Withheld W2 $ 2,000
Fuel Tax Credits - $ 500
Total Payable $ 5,500

Step 2 - Create a Bill in Xero

Log into Xero and navigate to Business > Bills to Pay then New Bill.

Fill out the fields as follows:

Step 1 Create a Bill

Step 3 - Record a Line Item for Each Component

Record a line item on the bill, one for each of the components applicable to you. A few things to keep in mind:

Step 3 Record Line Items

Step 4 - Approve the Bill, Ready to Reconcile

Approve the bill, then treat it as you would any other Bill.

Other Issues

You should review your ATO Integrated Client Account from time to time. If there's any other activity, like interest or penalties, on this account, then these should be included on this bill as well.