The GST in your bank account isn't your business's. You're holding it for the ATO until your BAS is due. The trouble is, it sits in the same account as everything else, and it's easy to spend.
The fix is simple: put it aside as you go, so when BAS time comes, the money is already waiting.
A simple system 🚨
Open a separate savings account just for tax. Many banks let you nickname it "GST" or "ATO".
Pick a rhythm. Weekly works well for most small businesses.
Transfer the GST portion of your takings. On GST-inclusive takings, the GST is one-eleventh of the total. On $11,000 of sales, $1,000 is GST.
Don't touch it. Treat that account as off-limits for everyday spending.
Set aside a little extra 🤏🏻
Use the same account for PAYG withholding from your employees' wages and any PAYG instalments. Moving those across each pay run means your whole BAS is covered, not just the GST.
You'll probably end up with a little more than you need, because GST credits on your purchases reduce what you owe. That buffer is a nice surprise, not a shortfall.
Why is it worth the effort? 🏋
No scramble to find cash when your BAS is due
Less temptation to treat the ATO's money as working capital
A clear picture of what your business actually has to spend
Less likely to need a payment plan
Keep it accurate ✅
The system works best when you reconcile your books regularly, so the GST figure you set aside is accurate. Exact BAS & Bookkeeping helps small businesses in Melbourne's east stay on top of their BAS, week by week. Call 03 9860 4480.
