GST Settings Overview
Note: In March 2018 QuickBooks will start rolling out a new GST experience. This will happen gradually over a period of time. If you can see View reports, you are in the classic experience or if you can see Run Reports, you are on the new experience. Please follow the relevant steps below based on the GST experience you are in
Classic GST Centre Settings Overview
GST centre settings are accessible in the current experience by clicking Edit GST or Add Tax in the upper right hand corner from within the GST centre dashboard.
Edit GST menu settings
- Start of current GST period: is selected prior to lodging the first BAS in QuickBooks and should be the first period lodged in QBO or first period liable for GST.
- Lodging frequency: determines the period for which all future BAS lodgements will be (e.g. Quarterly).
- GST method: determines if GST should be calculated on Cash or Accrual basis. Switching can have consequences.
- GST codes: determines the GST bookkeeping method (gst codes) used in QuickBooks and can be Simpler or Detailed. Switching can have consequences.
- Australia Australian Business Number (ABN)isplays in BAS reporting and on Sales forms where GST is charged/collected.
- PAYG Instalment method: Used for enabling Income Tax instalment to be included and reported on the BAS form
- Other Taxes:Used for enabling other tax values to be included and reported on the BAS form (e.g. WET, FBT, LCT, FTC)
Most of these settings default to the most common amongst small businesses, but for GST method and GST Codes great take care should be taken NOT to change those settings if any BAS have been lodged in QBO without understanding the impact first.
For more information about GST method setting impact please consult Cash vs. accrual accounting and its effect on GST.
Edit rates menu
The GST rates screen shows a list of all tax codes available for the GST agency and provides the ability to inactivate custom tax rates or add new rates.
- The Tax rate table displays all of available GST Codes and a description of what they are used for. Customers who migrate from a competitor product will likely see a lot of tax rates.
- Some rates have an Edit tax rate option on the far right. This feature enables users to edit tax rates (only avail on BAS-W1 and BAS-W2 and Custom tax rates) or make them inactive (hide across QBO).
- Add tax rate in the upper right-hand corner of the screen enables users to create custom tax rates that can map to some line items on the BAS form.
Add Tax menuThe Add tax feature allows you to create custom tax rates, group rates, or add tax agencies other than the primary agency used for BAS reporting. The vast majority of small businesses will not require custom tax rates, and for those that do they are usually tracked outside of QuickBooks and the values added to the BAS/IAS form when it comes time for lodgement.
- Add Tax rate will create a new tax rate in the current agency to calculate amounts outside regular GST or GST free rates. This feature will rarely be used by small businesses.
- Add Group rate will create a group tax rate, which enables users to combine multiple tax rates on the same line item for special goods or services sold. Again this feature will rarely be used for most small businesses.
- Add Custom tax will create a new tax agency in QuickBooks (other than the ATO agency used for BAS) to calculate and track edge-case tax rates*. This historically has been used as a workaround to track WET and other special taxes in QuickBooks, but we do not recommend usage overall.
New GST Centre Settings Overview
GST Settings in the updated Tax Centre experience for Australia are located in the upper right-hand corner of the GST Centre, and include:
- Tax Settings Menu
- Edit rates Menu
- Add Group Rate Menu
Tax Settings Menu
The Tax Settings menu has been reorganised to contain and reflect the 4 major tax types reportable through activity statements to the ATO: GST, PAYG-W (Payroll), PAYG-I (Income tax), and Other Taxes.
Goods and Services Tax (GST) Settings
- Goods and Services Tax (GST) is enabled once GST has been turned on within QuickBooks, and cannot be disabled.
- Lodging frequency determines when GST is reported by the small business and includes options for monthly, quarterly, and annual reporting period obligations. The most common reporting frequency in Australia is quarterly, and this is the default setting when setting up GST in QuickBooks.
- Accounting method is the basis by which the GST centre will report income and expenses. The most common reporting basis for small businesses is cash.
- GST codes control the bookkeeping method utilised by QuickBooks to track GST. All new QBO files default to Simpler GST on setup, as 99% of small businesses in Australia qualify under the new Simpler BAS reporting paradigm.
Existing QuickBooks customers using detailed GST coding can switch to Simpler GST by changing their setting, which will update all of their default GST tax codes across QuickBooks (except for recurring transactions) automagically. If you wish to have your GST bookkeeping method switched from Simpler to Detailed, please contact Customer Success to have a member of our team make the switch on your behalf.
For more information about Simpler BAS and GST bookkeeping, please see Simpler GST FAQ
For more information about choosing an accounting method, please consult with a bookkeeper or accounting professional.
For more information about GST method setting impact on BAS calculations please see Cash vs. accrual accounting and its effect on GST.
Tax withheld for employees (PAYG Withholding) Settings
Small businesses with employees report payroll withholdings (also called PAYG-W) to the ATO based on the amount of wages paid during the financial year, and ticking this setting enables payroll reporting inside the GST centre. This will also create a system generated PAYG withholdings payable liabilities account.
Turning on payroll reporting also enables the BAS-W1 and BAS-W2 tax codes, whether facilitating auto-entry from KeyPay or manually inputting payroll related expenses.
- Lodging frequency determines when payroll related information is reported to the ATO, and can be set at monthly or quarterly frequencies. This setting will enable reporting for the Instalment Activity Statement (IAS) if set to monthly.
Company income tax (PAYG Instalments) Settings
Small businesses can be required by the ATO to prepay income tax instalments throughout the year, and ticking this setting enables income tax instalment reporting inside the GST centre. This will also create a system generated PAYG Instalment liabilities account.
- Lodging frequency determines when the income tax instalment is reported to the ATO, and can be set at monthly, quarterly, or annual frequencies. This setting will enable reporting for the Instalment Activity Statement (IAS) if set to monthly.
- Installment method indicates how a business reports the instalment on the activity statement, and can either be a set amount or calculated rate.
For more information about PAYG Instalments please visit the ATO website or consult with a bookkeeper or accounting professional.
Other taxes Settings
There are four other types of tax values reportable on BAS or IAS, including Fringe Benefits Tax, Luxury Car Tax, Fuel Tax Credit, and Wine Equalisation Tax. The amounts for these tax types are not calculated within QuickBooks at this time, but as they are reportable on the BAS or IAS, these settings control input for recording on IAS and/or BAS when required by a small business.
- Fringe Benefits Tax can be reported on a monthly or quarterly basis, and if enabled will create a system generated FBT liabilities payable account.
- Luxury Car Tax will follow the reporting basis determined by GST, and if enabled will create a system generated Luxury Car Tax liabilities payable account.
- Fuel Tax Credit will follow the reporting basis determined by GST, and if enabled will create a system generated Fuel Tax Credit income account.
- Wine Equalisation Tax will follow the reporting basis determined by GST, and if enabled will create a system generated WET Liabilities payable account.
For more information about these tax liabilities please visit the ATO website.
Edit rates menu
The GST rates menu will show all GST codes available within QuickBooks, and enables users to deactivate custom GST tax codes created from a data migration that are no longer used. In the Action column users can disable tax rates from displaying within new transactions in QuickBooks (new feature!). Disabling a tax rate in this screen will only prevent rates from showing in the GST drop down, any existing transactions using that GST code will not be impacted.
Add Group Rate menu
The only new tax rate that can be created in our updated tax centre is a group rate, which enables users to combine together existing rates that have been either been created or used in the past to calculate on a single line item in a transaction.
- The Group Name controls what the label that will display in the GST dropdown on transactions in QuickBooks.
- The Description will display in the GST rates menu.
- The Tax Rate drop down is for users to choose from a list of existing tax rates already created in QuickBooks that map to certain lines of the BAS form.
- Applicable on enables users to determine how the tax rate will calculate against a line item, and whether it applies on the: net, tax, or net + tax amount of a line item.
With the numerous updates to the GST centre in QuickBooks, the system generated ATO tax authority is configured to support the majority of GST and BAS calculations required by Australian small businesses, and to keep this experience consistent we will no longer be support custom tax rates and separate tax agencies to be created for tracking other tax liabilities.
We natively support the VAST majority of small business compliance requirements in Australia with this update, but if we introduce support for custom tax code creation and/or custom tax agencies in the future we will let our customers know.
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