The GST Calculation Worksheet
The GST Calculation Worksheet is part of the suite of reports in Xero that make up the Business Activity Statement (BAS) and you can use it to see the transaction and GST totals calculated for the BAS Return. The worksheet shows a breakdown of GST amounts taken from all the transactions entered into Xero for the BAS period being reported on, and carries the relevant totals through to your BAS. You can also use the GST Audit Report for the period to see every transaction that occurred and was used in the calculation of totals on the Worksheet (including those that did not incur GST) based on the accounting method you're using (Accruals or Cash as specified in your Activity Statement Settings).
- General information about what is displayed for the Worksheet
- Where does Xero get the GST figures from?
- What can you see and do with the Worksheet?
The GST Calculation Worksheet only shows alongside some of the Activity Statements in Xero, depending on the GST calculation option you've chosen in Activity Settings (Monthly or Quarterly (Option 1)) - these and other settings also determine whether a BAS or IAS (Instalment Activity Statement) is presented for the current tax period.
The GST Calculation Worksheet is run alongside your Business Activity Statement (BAS) - you cannot run it directly from Report Centre. Your user role will determine whether you view Activity Statements and therefore the GST Calculation Worksheet, and if so, whether you can save and publish it or just view it. If you have the Adviser user role you can also access the Activity Statement from the Adviser menu.
Reports and budget role comparison
The BAS, GST Calculation Worksheet and GST Audit Report are all linked for the period of the BAS you're completing - once you're done lodging your Activity Statement you can 'publish' the BAS in Xero which will save all three reports together in Xero (on the Published tab in Report Centre) for your records and start up the appropriate new Activity Statement for the next period.
Note: Xero uses only one GST account and the GST portion of all transactions you enter into Xero will go into this account to be used to create the BAS. If you add additional GST accounts to your Chart of Accounts any GST amounts assigned to them will not be included on the BAS or GST Audit report. You can also read an overview of how GST is treated in Xero in The accounting behind Xero.
If your organisation is not registered for GST, none of the GST-related reports will display in Report Centre.
Xero uses only one GST account. The GST portion of all transactions you enter into Xero will go into this account to be used in the calculations for populating the BAS Return. The GST component of any transaction (or line item within a transaction) in Xero is determined by the 'Tax Rate' chosen when entering the transaction (that is, GST on Income, GST on Expenses).
How Xero determines the GST portion of a transaction is described below.
Custom tax rates
Xero provides a number of default tax rates but if these aren't right for your business you can create your own tax rates that can be of different tax types in order to determine where on the BAS Return they are reported. Tax amounts charged at these rates will also go through the GST 820 account. If you add additional accounts to be GST accounts to your Chart of Accounts any GST amounts assigned to them will not be included in the GST Return.
Xero ignores custom tax rates applied (for example, 3%, 5% or anything that is not 10%). This is because Xero's calculation worksheet treats GST as 1/11th or 10%. Xero also provides a message on your BAS if there are custom tax rates other than what Xero's expecting for a tax type.
The cash basis BAS only includes transactions that are cash payments on the date they were ‘paid’ in Xero, where that date falls in the period you are completing the Return for. ‘Payment’ transactions means any Spend Money, Receive Money or payments made or received for invoices, bills, credit notes and expense claims that have a GST component.
The accruals basis BAS includes all cash and invoice or bill transactions on the date they were made or invoiced, where that date falls in the period you are completing the Return for. This means Spend Money and Receive Money transactions on the date they occurred, or invoices, bills or credit notes on the date they were raised, or expense claims on the date specified as the reporting date (regardless of whether they have been paid) that have a GST component.
Tax treatment and tax rate
On a transaction you can choose whether the overall transaction has GST, how it is to be calculated and the tax rate to be applied to each line item.
Items that have a tax rate
- The tax treatment for a transaction is the setting 'No Tax', 'Tax Inclusive' or 'Tax Exclusive' - this determines how the GST is calculated overall for the transaction based on the individual tax rate used on each line item. Specify this each time you create a transaction using the 'Amounts are' option on invoices or bills or the 'Include tax' check box on bank transactions and journals. Please note, the 'No Tax' option is different from a line item or transaction that simply doesn't attract tax (that is, is 0% GST). When you choose the 'No Tax' option, Xero applies the BAS Excluded tax rate. This means the item will always be excluded from BAS.
- The Tax Rate specified for each line item is the actual percentage rate used to calculate the tax on that line, and the transaction total will either display the total tax for the item as being included in the subtotal or excluded and added on depending on the tax treatment chosen for the transaction. The tax rate for each line item will default to the tax rate set for the account, unless you have specified a rate particular to your customer or supplier and you can change to another tax rate for just this transaction as required.
- Whilst you can enter your own tax rates in Xero, to meet basic Australian GST reporting requirements on the BAS Return, default tax rates are provided in Xero which can be used as they are, or edited.
- A transaction that has a GST component (even if that means no GST is incurred) will be used in the calculation of your total sales or purchases for the period where that GST rate is required to be reported to the ATO. The specific GST amounts are calculated for each tax rate and carried through to the appropriate box on the Return (described below). Each transaction is listed by tax rate on the GST Audit Report. If you're not sure which tax rate to use on a transaction to ensure it shows up in the right box on your Return, review the list of boxes and rates used below.
- If you don't want Xero to include the transaction on the Activity Statement, use the 'No Tax' option. Xero will automatically apply the BAS Excluded tax rate. Specify this each time you create a transaction using the 'Amounts are' option on invoices or bills or uncheck the 'Include tax' check box on bank transactions and journals.
- If your transaction is set to 'No Tax', Xero determines that you do not want to apply a tax rate to the transaction and therefore the tax rate column or field will not be editable.
- However, if you mean that your transaction is reportable but doesn't incur GST (that is, GST is 0%) then you should leave your overall tax treatment as 'Tax Inclusive' or 'Tax Exclusive' and choose an appropriate tax rate that doesn't attract GST - the 0% GST rates available depend on whether you're entering sales or purchases transactions and the range of rates you may have set up yourself - refer to the list of boxes and rates reported in each below.
- As it happens, a revenue transaction with amounts using the rate 'No GST' or purchase transactions using the rate 'BAS excluded' fall outside of the scope of GST as determined by the ATO and as such will not be included in the GST Worksheet calculations at all.
- Transactions that are not used by the GST Calculation worksheet and therefore aren't reported on the BAS Return are still listed on the GST Audit report (in individual sections) as being transactions that occurred in that period. You can use this as a useful reference when checking that all the transactions you expect to be included in your Worksheet totals have been correctly accounted for.
Refer also to:
- List of boxes on the GST Calculation Worksheet to see which tax rates are reported in each box if you're unsure of how the rate you use will be reported.
The BAS is run using the GST Accounting Method and frequency (GST Calculation) you've specified in your Activity Statement Settings and the worksheet will be run automatically to accompany this for the period specified on the BAS. If you want to view the worksheet for a different period you'll need to change the dates on the BAS (although be aware that your settings may determine that an Instalment Activity Statement (IAS) and not a BAS be displayed for a particular date range).
If you change the figures in editable boxes the current suite of reports making up the BAS will be saved automatically on the Reports Draft tab.
GST Calculation Worksheet totals
The figures shown on the worksheet come from transactions in the period across each different Tax Rate used, in order to determine the reportable amounts for sales, purchases and GST that need to be carried through to the BAS Return. Each total can be tracked back to the full list of transactions for the period displayed on the GST Audit Report, broken down by Tax Rate.
If you are viewing an Activity Statement that has been saved or published by someone with the Adviser user role, you may see summary information or additional notes on the report. Depending on the status of the report and your role you will be able to export, archive, save or edit it.
Business Activity Statement (BAS) and GST Audit Report
Provided your user role allows, you can export the BAS to Excel, PDF or Google Docs formats. You can also print directly from your browser.
Save the suite of reports that make up the current Activity Statement (that is, BAS, Audit Report and GST Calculation Worksheet if present) in Xero in your list of published reports in order to keep a record of your GST for the period. Once published, you cannot edit the report, but you can run it again by choosing the dates of this period.
Publishing also triggers Xero to update the default Activity Statement to the appropriate Activity Statement for the next period so that you don't have to remember where you're up to or what the dates of the next period are. The next Activity Statement may be a BAS or an IAS depending on the frequency you have chosen for these reports in your Activity Statement Settings.
If you are still working on the Activity Statement or have sent it to your accountant or bookkeeper to review, it will appear in your list of draft reports. If an Activity Statement exists in draft, this will always be displayed by default - you'll need to publish or delete it from the Draft tab before Xero will display the default report for the current period (which might be an unedited version of the report currently saved, or one for a later period if the draft report is from a previous period). Your user role will determine whether you can delete a draft report.