This page explains the function of each setting in the GST (Goods and Services Tax) section in QuickBooks Online.
|Before you start, get your Business Activity Statement (BAS) or GST Registration with the Australian Taxation Office (ATO) to help you edit your Tax settings. You can speak with the ATO directly or contact your Accountant or Bookkeeper to get a copy.|
After setting up GST and BAS for the first time in QuickBooks Online, you can make further changes to your GST settings. In the GST tab on the left menu, select the Settings button on the top-right corner. You will be presented with the following options:
- Tax Settings
- Edit rates
- Add Group Rate
Goods and Services Tax (GST) Settings
- The Goods and Services Tax (GST) tick-box 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.
- GST codes control the bookkeeping method utilised by QuickBooks to track GST. All new QuickBooks Online 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) automatically.
If you wish to have your GST bookkeeping method switched from Simpler to Detailed, contact our support team so we can make the switch on your behalf.
For more information about Simpler BAS and GST bookkeeping, see Simpler GST FAQ.
For more information about choosing an accounting method, consult with a bookkeeper or accounting professional.
For more information about GST method setting impact on BAS calculations, 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, so that pay runs finalised through the Employees section can have the proper tax codes applied to them.
- 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, 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 (FBT) 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, visit the ATO website.
The GST rates menu will show all GST codes available within QuickBooks, and enables users to deactivate tax codes that are no longer used.
In the Action column users can disable tax rates from displaying within new transactions in QuickBooks. 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
Combine existing rates in QuickBooks 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 customers 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 customers 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.
Can I add a custom tax rate?
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 not be supporting 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.