ATO late lodgement penalty: up to $364 per 28 days, capped at $1,820 per document · interest 11.43% p.a. compounding daily · See how to remit them →
The lodgment steps
Preparing and lodging a BAS in Xero
Reconcile to zero first
An unreconciled quarter produces a fictional BAS. This is the precondition, not a step - every unmatched line is a figure Xero is guessing at on your behalf.
Open Accounting, then Activity Statement
Xero assembles the period's G1, 1A and 1B - plus W1 and W2 if you run payroll - straight from your transaction coding.
Run the five pre-lodgment checks
The checks set out below. They take about ten extra minutes and catch the classification errors that generate most amended BAS.
Lodge
Lodge direct to the ATO from Xero once connected via your myGovID or agent setup, or export the figures into ATO online services. Payment is separate and due the same day - lodge even if you cannot pay.
Publish and lock the period
Locking stops later edits silently rewriting a lodged quarter. An unlocked file is how "why doesn't the September quarter match anymore" happens.
The five pre-lodgment checks
| Check | What you are catching |
|---|---|
| 1. GST-free items coded as taxable | Basic food, exports and medical supplies claimed with credits they do not carry. Run the GST audit and exception reports, then scan the GST-free and BAS-excluded lists for strays |
| 2. Bank fees, wages and super coded with GST | The classics: financial supplies, wages and super carry no GST, and one new bank rule coded as GST on expenses quietly inflates 1B all quarter |
| 3. Capital versus expense | Assets over the write-off or pooling thresholds expensed at G11 instead of capital at G10, plus the car limit's cap on the credit claimable for a vehicle |
| 4. Private use and entertainment | The owner's private spending claiming credits, which also feeds the Division 7A ledger in a company, and entertainment's no-credit rule applied properly |
| 5. W1 and W2 against STP | The BAS wage labels agreeing with what Single Touch Payroll has already told the ATO. The mismatch here is what triggers employer reviews |
Check 3 depends on the current instant asset write-off thresholds and, for vehicles, the car limit. Check 4 is where private spending in a company becomes a Division 7A problem as well as a GST one.
Ten extra minutes, once a quarter, versus the amended-BAS-with-interest version of finding out later. Quarters that cannot pass check 1 because the coding was guesswork all along are the signal for a quarterly review arrangement. Quarters that were never lodged at all are a different problem with a faster clock.
Frequently asked questions
How do I lodge my BAS from Xero?
Why doesn't my Xero BAS match my bank account?
Can Xero get my BAS wrong?
What if I find an error after lodging?
Should I lodge if I can't pay?
General information only - not personal tax, financial or legal advice. Consider your own circumstances or speak to a registered tax agent. Remission of penalties or interest and payment plans are decisions of the ATO and outcomes can't be guaranteed.