Applying PAYG to your BAS tax return in Zoho Books

How to match your tax payment/claim for GST with PAYG on the BAS statement

If you are in Australia, and are registered for GST, you need to do your quarterly BAS. Zoho Books handles BAS beautifully for you, and it is easy to categorise the payments/returns from the ATO in Books. However, if your business also needs to pay PAYG, the BAS balance at the ATO is different than the BAS balance in Zoho Books. Here are the steps on how you need to manage this.

PAYG is shown in your ATO statement as either box 5A (you owe the ATO), or 5B (the ATO owes you)

Setup -
Typically the PAYG is a liability that is then booked to Salaries and Wages. First- Create a PAYG account, as type "other current liability", and ensure it is not included in the BAS.

Once the PAYG account is created, create a manual journal, and make the following posting
PAYG - Cr amount in box 5A
Salaries and wages - Dr amount in box 5A

Next - create an expense record under Purchases
The expense is to your PAYG account, and the expense if paid from your bank account that is used to receive and pay tax related to the BAS. The amount of the expense is the amount in box 5A of your BAS statement as per ATO.
The transaction in the background is
PAYG - Dr amount in box 5A
Bank - Cr amount in box 5A

In the BAS - set the BAS statement to Claimed/Paid

Note: it will be Record Claim if the ATO owes you, and it will be record payment, if you owe the ATO.
This will generate a transaction in your bank module.

Your BAS statement in Zoho Books has a claim to the ATO of $2,850 (ATO owes you)
Box 5A shows you owe the ATO $3,000 for PAYG
You pay the ATO the balance of $150

Step 1: create a manual journal Dr PAYG $3,000 - Cr Salaries and Wages $ 3,000
Step 2: create an expense report for expense account PAYG $3,000 paid through bank
Step 3: mark your BAS as claimed
Step 4: you have paid the ATO the balance of $150 and it reflects in your bank transactions as uncategorised

Step 5: click on the transaction to categorise, and use the filter to select the narrow down to the right transactions (recommended: between the BAS claim/payment and the PAYG payment as the range - plus the date range). Don't forget to check "Include Deposits" - click Search.

Step 6: select the correct transactions - when the balance is $0.00 you can click Match

Now your PAYG is correctly entered in your system, and your BAS statement correctly closed.

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