How to reconcile / categorise BAS payments? (Australia GST)

DanDan Member Posts: 11

Hi, I'm not entirely sure how to categorise my BAS payments after the transaction appears (through bank connection). I have been categorising it in 'Owners Investment / Drawings' currently...
Also a general question for any 'Owners Investment / Drawings' transactions ... do we need to change the category and account? Or just the category?

Thanks for any help

Comments

  • JordanDJordanD Administrator, Moderator Posts: 468 admin

    Hi @Dan

    Within the categories option, there should be the option to assign "Sales Tax Payment to Government" and it will then ask you to specify which Sales Tax it was a payment for.

    In terms of your Owner Investment/Drawings question, if you are using it for an owner's draw (money out of the business) you will want to select which business bank account the funds were moved out of. Oppositely, for the investment (money coming into the business), you would want to select bank account that the money was moving into the business to.

  • DanDan Member Posts: 11

    Hi @JordanFromWave , apologies for the delayed reply. I don't appear to have a category option "Sales Tax Payment to Government" ... when I click 'Add a new category' that doesn't exist? Any advice appreciated.

  • NeilRNeilR Member Posts: 14

    @Dan said:
    Hi @JordanFromWave , apologies for the delayed reply. I don't appear to have a category option "Sales Tax Payment to Government" ... when I click 'Add a new category' that doesn't exist? Any advice appreciated.

    You might have the old version of wave? They're upgrading Australia at the moment. I'm not an accountant but my understanding is that you would need to allocate the BAS Payment into is components that make up the payment. I would use the split function to split your bank transaction into the components.

    eg, A total payment of say $10,000 which is represented by GST Collected $8,000, GST Paid $1000, PAYG Withholding $2,000 and PAYG Income Tax Instalment $1,000, would be allocated as follows;

    GST Collected $8,000
    PAYG Withholding $2,000
    PAYG Income Tax $1,000
    GST Paid $1,000

    Create those as New categories if you don't have them

    edited January 21, 2019
  • DanDan Member Posts: 11

    Hi @NeilR , thanks for the comments.
    I have split the transaction into PAYGI and GST... but again I can't work out how to categorise the split transactions... In chart of accounts there is a 'Sales Tax Payable' under the 'Liability/Credit Card' section... but that doesn't show up in the transaction category options? Do I make a custom category under 'Equity' for GST and PAYGI?

  • DanDan Member Posts: 11

    Hi I'm just wondering if someone can give an update on the correct method for reconciling Australian BAS payments in Wave. I have two components as a sole trader; GST and PAYG income tax installment. So GST I categorise to 'Liability > Sales Tax' but where do I categorise PAYG too?

  • Gaz12Gaz12 Member Posts: 3

    I have the same question. GST is under Liability > Sales Tax, and this works fine for the Sales tax report, and shows GST paid to Government. But how can PAYG be added in this? I tried setting PAYG as a Sales Tax category, but that can’t work as the full amount is a tax, there is no % for it. So currently I track PAYG as a separate payment, and use an expense category called Tax - PAYG Installment.

  • AlexLAlexL Administrator Posts: 1,683 admin

    Hi @Dan and @Gaz12 . I'm unsure exactly how PAYG works , but if you'd like to further illuminate how it functions vs a regular tax (like GST) and what you'd need in Wave to have it work, someone in our Community may be able to chime in.

  • Gaz12Gaz12 Member Posts: 3
    Hi @AlexL see https://www.ato.gov.au/Business/PAYG-withholding/
    So when I run the Sales Tax report for a quarter, I want to see the GST I still owe, less what I have paid to government, also see the PAYG Withholding instalments I owe, less PAYG paid to government.
  • Gaz12Gaz12 Member Posts: 3
    I might have figured this out. This may work for a sole trader who pays himself monthly:
    Create a Sales Tax category PAYG (the % amount is irrelevant)
    Any tax office PAYG payments from bank statements get set to PAYG payment to government.
    Create Journal entries each month for full wage, as Payroll - Salary & Wages as Debit, and Payroll - Salary & Wages as credit for actual money transferred to pay yourself, add another credit for (PAYG) Tax Collected (Liability).
    Then running a sales tax report shows GST and PAYG amounts. I use this report in helping me fill out ATO BAS statements
    edited May 26, 2020
Sign In or Register to comment.