Payment and refund outcomes¶

Every activity statement ends with a single final number. It is either an amount you pay to the ATO, or an amount the ATO refunds to you. Which one it is depends on a simple sum.

The statement adds up everything you owe the ATO, then subtracts everything the ATO owes you. Whatever is left over is your final outcome.

In one line

An activity statement nets what you owe the ATO against what it owes you — a positive total means you pay, a negative total means you get a refund.

Why this matters¶

Before you lodge, it helps to know whether you will be paying or receiving money. Once you understand the sum behind the final number, you can read your statement with confidence and set aside the right amount well before the due date.

What you will learn¶

How an activity statement works out one final amount
The difference between a payment outcome and a refund outcome
That any payment is due by the lodgment due date

Understanding the concept¶

The activity statement brings together two sides.

What you owe the ATO can include the GST you collected on your sales, the tax you withheld from employees' wages, and any PAYG instalment towards your own income tax.

What the ATO owes you can include the GST credits on your business purchases.

The statement adds up the first side and subtracts the second side. The ATO totals the amounts owing and the amounts credited, then shows the difference as a single final figure.

If the amount you owe is greater than the amount owed to you, the difference is payable — you pay the ATO.
If the amount owed to you is greater, the difference is refundable — the ATO pays you (or puts it towards any other tax debt you have).

The final figure is shown clearly on the statement as the amount to pay or the amount to be refunded. When it is a payment, it is due by the lodgment due date for that statement.

For accountants & bookkeepers

On the activity statement, the amounts payable to the ATO are totalled at label 8A and the amounts the ATO owes you are totalled at 8B. The net result is shown at label 9. If 8A is greater than the credit total, label 9 is payable to the ATO; if the credit total is greater, label 9 is refundable to you or offset against other tax debts. The GST portion draws on the summary labels 1A (GST on sales) and 1B (GST on purchases).

Example¶

Jordan runs an online shop and lodges a quarterly activity statement. This quarter Jordan collected $6,000 of GST on sales and withheld $2,000 of tax from a casual worker's wages — so the amount owing to the ATO is $8,000. Jordan also has $3,000 of GST credits on stock and packaging bought during the quarter. The statement subtracts the $3,000 credit from the $8,000 owing, leaving a final amount of $5,000 to pay. That $5,000 is due by the lodgment due date.

The following quarter, Jordan buys a lot of new equipment and makes fewer sales. This time the GST credits are larger than the amounts owing, so the final figure is a refund and the ATO pays Jordan instead.

Common mistakes¶

Assuming a statement always means paying — a quarter with big purchases can end in a refund.
Forgetting the GST credits on purchases — they reduce what you pay.
Missing the due date — even after lodging, the payment is due by the lodgment due date.

How this works in myaccountant¶

In the app — myaccountant fills in the activity statement from your books and shows the single final figure, so you can see straight away whether you are paying the ATO or being refunded before you lodge.

Key points¶

The statement adds up what you owe the ATO and subtracts what it owes you.
A positive total means you pay the ATO.
A negative total means the ATO refunds you (or offsets it against other tax debt).
GST credits on purchases reduce the amount you pay.
The final figure is shown clearly as the amount to pay or be refunded.
Any payment is due by the lodgment due date.

Learn next¶

General information only — not tax, super or financial advice.

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