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Reporting PAYG Withholding on BAS and IAS

SOLVEDby QuickBooksQuickBooks Online25Updated 1 year ago

Learn how Pay-as-you-go Withholding (PAYGW) is calculated in QuickBooks.

If you use QuickBooks Payroll powered by KeyPay, all PAYGW amounts calculated in the pay runs you finalise will be automatically exported to QuickBooks as a journal entry.

The GST section of will pick up the sum of all PAYGW amounts for the BAS/IAS period to be lodged, and you can review this amount before lodging your BAS/IAS.

Figures for Total salary, wages and other payments and Amount withheld from payments shown at W1 under PAYG tax withheld are imported into the GST using BAS-W1 and BAS-W2 tax codes.

As an example, a simple payrun journal will include:

  • DR to Wage Expense
  • DR to Superannuation Expense
  • CR to Payroll Clearing
  • CR to PAYG Withholdings Payable
  • CR to Superannuation Payable

The Wage Expense line will need to have a GST code of BAS-W1 for Total salary, wages and other payments, and the PAYG Withholdings Payable line will need have a GST code of BAS-W2 for Amount withheld from payments shown at W1, which will then show within your BAS automatically.

Lodging BAS with PAYGW

When PAYGW is enabled in Tax settings, QuickBooks will create a PAYG Withholdings Payable account, enables BAS-W1 and BAS-W2 tax codes, and enables the IAS or BAS Lodgement.

The reporting frequency determines whether PAYGW will be reported on IAS (no GST) or BAS (alongside GST). To include PAYG on your BAS lodgement, make sure your reporting frequency is set to the same reporting frequency as GST in Tax Settings.

After selecting the Prepare IAS or Prepare BAS button in the GST menu, if PAYGW is due QuickBooks will include a PAYGW stage within the lodgement flow. Total salary, wages and other payments as well as PAYG withholding amount figures will calculate based on the period and journal entries using BAS-W1 and BAS-W2 tax codes.

Tick the I have other PAYG withholding to report box if you need to report Amounts withheld with no ABN or Any other amounts you withheld and click the green Next button when you are done.

In the Instalment or Business Activity Statement Summary you will then see all lines related to PAYGW are calculated automatically and ready to mark as lodged.

Reporting PAYGW monthly (IAS) and GST quarterly (BAS) in QuickBooks

To enable PAYGW monthly (IAS) reporting, in Tax settings select the Tax withheld for employees (PAYGW) box and set your reporting frequency to monthly.

When PAYG monthly reporting is enabled, the first two months of each quarter will display a Prepare IAS button under the To lodge section of the GST dashboard.

QuickBooks will automatically import PAYGW figures from your payroll journals just for that month, and you can mark as lodged and even apply a tax payment against your IAS lodgements.

After you have lodged IAS for months 1 and 2 of the quarter, the Prepare BAS option will be available. When making your BAS lodgement, QuickBooks will automatically look at GST for the entire quarter, but PAYGW figures for the final month only.

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