A big Q2 BAS bill can sting — especially if cash is already tight — but a high BAS isn’t always a red flag.
You need to figure out what’s driving the number, then set up a system so your BAS bills are predictable, not painful.
If you’re on accrual GST, this blog will help you identify the cause of the spike.
Note: With cash GST, you report only when money goes in or out of your account — so a high BAS means you’ve received more cash. See our guide on How to Stay Ahead of Surprise Tax Bills for more.
What Makes Your BAS So High?
How Accrual GST Drives Up BAS Bills
On accrual GST, your BAS is based on invoices you’ve sent, not what’s been paid. If you’ve issued big invoices this quarter but haven’t banked the cash, your GST bill still goes up.
This can catch business owners off guard.
Hypothetical example:
A trade business invoices $600,000 in Q2 but only banks $450,000 in payments. The BAS still counts the full $600,000, so the GST bill will appear high considering the cash on hand.
Why More Wages and PAYGW Mean a Higher BAS Bill
PAYG Withholding (PAYGW) is often the biggest part of your BAS, especially if you’ve hired more staff or paid bonuses. If your W1 (salary, wages, and other payments) or W2 (amounts withheld from wages) figures are up, your BAS will be too.
For many construction businesses in particular, PAYGW is the largest cost each quarter.
Missed Expenses and Low GST Credits Can Spike Your BAS
If supplier bills or expenses aren’t entered before you lodge your BAS, you can’t claim their GST credits for that quarter. Instead, you’ll need to claim them in the next BAS period.
This timing mismatch can make your current BAS bill feel high and disrupt your cash flow planning.
GST Coding Errors Make Your BAS Even Higher
GST coding mistakes, such as applying GST to wages, owner drawings, or bank fees, can inflate your BAS and attract ATO attention. Double-check for these errors and fix them early.
Checklist: What’s Driving Your High BAS Bill?
- Did you invoice more or earlier than last quarter?
- Has your PAYGW jumped due to new staff or higher wages?
- Are GST credits down because supplier bills weren’t entered in time?
- Any GST coding errors in your accounting software?
If you ticked any of these boxes, your high BAS is a typical sign that your business is growing. Still, it’s always worth a review.
How to Avoid a BAS Shock Next Quarter
1. Set aside GST and PAYGW every week
Open a separate account and transfer around 15–25% of your weekly income (before expenses) to cover GST and PAYGW.
The exact percentage depends on your sales mix, wages, and expenses, but this range suits most accrual GST businesses. Review your BAS history to fine-tune the amount.
2. Review your numbers every month
Schedule a check-in to review sales, expenses, payroll, and GST coding — don’t leave it until BAS time. You can catch errors, missed bills, or unusual spikes while there’s still time to fix them.
3. Book a BAS review if you keep getting surprised
If your BAS still feels unpredictable, get a professional review. An expert can spot coding errors, PAYGW issues, or timing problems, and help you set up better systems.
High BAS Bill FAQs
Is a high BAS always a bad sign?
Not always. Growth, invoice timing, or delayed expenses are common reasons.
What’s the biggest cause of BAS blowouts for trades?
PAYGW and missing supplier bills are the usual suspects.
What’s the difference between cash GST and accrual GST?
Cash GST is reported when paid/received; accrual GST is reported when invoiced, regardless of payment.
Should I switch from accrual to cash GST?
If your business has an annual turnover of less than $10 million, this may help. Strict rules apply, so seek advice first.
Predictable BAS Bills Start with a Quick Review
A high BAS isn’t always a mistake; it’s a sign to review your growth, fix errors, and tighten your cash flow system.
Growth iQ helps Adelaide businesses turn high BAS surprises into steady, manageable numbers. Book a BAS review with our team to avoid next quarter’s shock.