Tax & business obligations
GST and cash flow: why the bank balance can mislead you
GST included in customer payments can make available cash look larger than it is. Plan for the amount you may owe when your BAS falls due.
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- 2 min read
Quick answer
On a fully taxable $110 sale, $10 is GST. Your eventual BAS position also depends on eligible GST credits and other amounts, so track it in your records and forecast the payment date rather than treating the whole receipt as free cash.
Your bank balance can include money received from customers that relates to GST. If you spend every dollar because it appears in the account, a later BAS payment can become a surprise.
A simple sale
Suppose your business is registered for GST and makes a fully taxable sale for $110 including GST. The price before GST is $100 and the GST component is $10. The GST calculator shows how to add or extract GST on a fully taxable sale. It is not a BAS calculation.
You may also have GST credits on eligible business purchases. For example, if you buy a fully taxable supply for $55 including $5 GST and meet the requirements to claim a credit, the illustrative net GST from those two transactions is $5. Actual BAS amounts depend on all relevant transactions, your accounting method and your circumstances. A registered tax or BAS agent can check your records.
Why timing matters
The $110 customer receipt may arrive weeks before the related BAS payment. In that interval it sits in the bank alongside cash needed for wages and suppliers. A profit and loss statement may show sales excluding GST, while a cash-flow forecast records actual receipts and payments. Use one clear basis and include the expected BAS payment in the period it is due.
Suppose a café has $18,000 in the bank on Monday and $12,000 of bills due this week. If its bookkeeper estimates a $7,000 BAS payment soon, the apparent $6,000 spare balance is misleading. The owner needs to review the forecast and confirm the BAS estimate before ordering more stock.
A practical routine
Keep invoices and purchase records current. Reconcile bank transactions regularly. Ask your bookkeeper or registered agent for an estimate of the next BAS position and due date, then set aside cash as receipts arrive. Update the cash-flow forecast rather than waiting for the lodgement notice.
If you already cannot pay, read the overdue BAS guide and contact your registered agent or the ATO early. An unpaid BAS needs attention even if business sales look strong.
Important things to know
- GST-free, input-taxed and mixed supplies do not follow this simple $110 example.
- A GST credit is subject to the applicable rules and supporting records; do not assume every purchase qualifies.
- Registration, accounting method, reporting frequency and due dates depend on your circumstances. Confirm them with the ATO or a registered tax or BAS agent.
Who can help with this
Depending on your situation, these professionals may be the right next step.
How to find and check a professionalOfficial resources
Related guides
Starting a business
When do I need to register for GST?
You must register for GST when your GST turnover is $75,000 or more ($150,000 for non-profits), and within 21 days of becoming required to. Taxi, limousine and ride-sourcing drivers must register regardless of turnover.
5 min read
ATO and tax
What should I do if my BAS is overdue?
Lodge your overdue BAS as soon as you can, even if you can't pay the amount owing, and contact the ATO. Late lodgement can attract a failure to lodge penalty, and you can deal with the payment separately through a payment plan.
5 min read
Cash flow
How to build a cash-flow forecast
A useful forecast follows payment dates, not sales dates. Start with cash in the bank, then map receipts and payments for each coming period.
2 min read
Put this into practice
Sources
- Register for GST, business.gov.au (accessed 2 Oct 2026)
- Guide to managing cash flow, business.gov.au (accessed 2 Oct 2026)
- Accounting for GST in your business, ATO (accessed 2 Oct 2026)
Last reviewed 2 Oct 2026. We review this guide regularly and when official guidance changes.