Before You Lodge the September BAS: GST Checks for Processors

The July to September BAS is due on 28 October 2026 for businesses that lodge themselves. A due-date summary from ScaleSuite notes that online lodgers may get two extra weeks, and that the Q1 date for clients of a registered agent under the ATO's lodgement program is 25 November 2026. Whichever applies, the job is the same: making sure the GST figures in Xero agree with what happened.

For an e-commerce brand, GST rarely goes wrong on the obvious lines. It goes wrong between the store, the payment processors and the ledger: refunds that did not carry their tax, fee GST claimed where none was charged, and fee GST missed because a payout was never posted.

GST on sales: start from the store, not the bank

Label 1A, GST on sales, should be supported by your store's own tax records, not inferred from deposits. Deposits are net of fees and refunds and land days after the sale, so they cannot tell you how much GST you collected in the quarter.

Shopify's Finances report documentation sets out the two bases you need to keep apart. The Taxes column of the Total sales by order report is positive "for a sale on the date that an order was placed", while the payments reports are "based on captured payments across your payment gateways". An order placed on 30 September and captured on 1 October sits in different quarters depending on which report you read. Decide which basis supports your 1A figure, and use it every quarter.

The same page contains a detail worth knowing about. For its United States sales tax report, Shopify explains that when a refund is processed for a line item, "only the tax that's associated with that line item is refunded". But "when a custom refund amount is entered (not associated with a specific line item), the tax isn't refunded" and stays in that report. The page does not set out the same rule for Australian GST, so if your team issues goodwill or partial refunds as custom amounts, check whether your store's tax figure fell with the price of the sale.

That matters because a refund that reduces the price of a taxable sale generally gives rise to a decreasing adjustment. As a CPA-written guide from Tax Window puts it, the adjustment belongs in "the BAS period when it becomes known, not when the original transaction occurred". Before you lodge, pull the quarter's refunds, filter for those not tied to a line item, and agree with your accountant how their GST is being treated. Gift cards are the other common distortion on 1A; we covered them in Shopify gift cards at month-end.

GST credits on processor fees: each processor is different

Label 1B is where processor fees cause the most quiet errors, because the GST treatment differs by processor and the fee usually arrives netted out of a payout rather than as a bill. As business.gov.au states, "To claim GST credits, the buyer must have a valid tax invoice." So the useful question for each processor is: does it charge GST on its fees, and where is the tax invoice?

The sources behind each row:

• Shopify Payments. Shopify's Australian tax reporting page says "GST at the current rate of 10% is included in all Shopify Payments processing fees". A monthly invoice showing the GST on transaction fees is generated on the 5th of the following month, under Settings, Payments, View payouts, Documents.
• Stripe. Stripe's support note for Australian businesses says "goods and services tax (GST) applies to all Stripe fees at the prevailing standard rate", and that you receive a monthly tax invoice for it. Our Stripe payout guide shows where that GST sits inside each balance transaction.
• PayPal. A GST Q&A from Taxed quotes clause 12.2 of PayPal's Australian PDS: "Unless otherwise expressly set out in this PDS, our fees are GST exempt." It concludes that "no GST credit would be available" for those fees. The exceptions are certain monthly fees; PayPal's fee page, for example, lists one monthly fee as including GST. A PayPal fee account coded with GST is worth a second look.
• Afterpay. Code the fee as the Afterpay tax invoice shows it, as set out in our Afterpay settlement guide.

The UTC boundary on Shopify's invoices

Of its invoice download, Shopify says: "This feature uses the UTC time zone, which might be different from your store's time zone." For a store on Sydney time, that moves the edges of the quarter.

Sydney was on AEST (UTC+10) on both 1 July and 1 October 2026, because NSW daylight saving did not begin until Sunday 4 October. So the July, August and September invoices together cover 10:00 am on 1 July to 9:59 am on 1 October, Sydney time. Fees from midnight to 10 am on 1 July sit on the June invoice, and fees from midnight to 10 am on 1 October sit on the September invoice.

Here is an illustrative tie-out, assuming fee GST is posted in Xero by transaction date:

If Xero shows $1,249.60, the $2.55 gap against the invoices is fully explained. Posting fees by payout date adds a further timing difference; either basis works if you use it consistently. Shopify's page also offers a second route: the transactions export carries GST line by line, which makes the boundary hours easy to isolate.

Clear the clearing accounts first

A balance left in a Shopify Payments, Stripe or PayPal clearing account at 30 September is one of two things: a timing item you can name, such as sales captured but not yet paid out, or a payout that was never fully decomposed. The second kind has a GST effect. If a payout's fees were never posted, their GST credit is missing from 1B. If an unexplained remainder was pushed to suspense, any GST inside it is missing too.

The test is simple: for each clearing account, list what makes up the closing balance. Anything you cannot list needs clearing before you lodge.

Run the GST Reconciliation report

Xero's GST Reconciliation report is the check that ties the quarter together. A walkthrough from Digit sets out the steps. Publish or finalise all prior-period activity statements first. Then choose a From date that gives an opening balance of zero, as Xero recommends. Where a prior-period variance appears, find out why, then either revise the activity statement for that period or carry the adjustment into the next BAS. A back-dated refund or a payout posted into a closed quarter typically shows up here first.

A short pre-lodgement checklist

1. Confirm 1A against the store's tax report on the basis you have chosen, and note the basis in the workpaper.
2. Pull refunds not tied to a line item and confirm how their GST has been handled.
3. Tie Shopify Payments fee GST to the three monthly invoices, adjusting for the UTC hours at each end of the quarter.
4. Tie Stripe fee GST to Stripe's monthly tax invoices.
5. Check that PayPal fees carry no GST credit, apart from any GST-inclusive monthly fees.
6. Code Afterpay fees as its tax invoice shows.
7. List the closing balance of every clearing account at 30 September.
8. Run the GST Reconciliation report and explain every variance.

Where this leaves your close

Most of this work goes away if the monthly close is done properly. When every payout is decomposed into sales, fees, the GST on those fees, refunds and chargebacks, and each payout is proven to sum to its deposit, the quarter's BAS is a sum of reconciled months, not a fresh investigation. That decomposition is what we built Vert to do, with a balanced journal drafted for your approval in Xero. If you want to see it on your own payouts, you can join the pilot.

This guide describes what the processors and sources say; how it applies to your business is a question for your accountant or registered tax agent.