Getting a refund¶

Not every Activity Statement means you owe money. Sometimes it works out the other way — the Australian Taxation Office (ATO) owes you. This often happens when the GST credits on your purchases add up to more than the GST you collected on your sales.

When that happens, the ATO pays the refund electronically into the bank account you have nominated with them. So there is one thing you need to have set up first: your bank details on record with the ATO.

In one line

When your Activity Statement shows the ATO owes you, the refund is paid electronically into the bank account you have nominated with the ATO.

Why this matters¶

A refund is your money coming back. To receive it without delay, the ATO needs your bank details on record. It also helps to know a refund can be held or used to reduce another debt — so you understand why the amount that lands might differ from what you expected, or take a little longer.

What you will learn¶

When your Activity Statement results in a refund
That refunds are paid electronically into your nominated bank account
That a refund may be held or offset against other tax debts

Understanding the concept¶

Your BAS compares the GST you collected on sales with the GST credits you can claim on purchases. If your credits are larger — for example, in a quarter with a lot of setup costs — the statement works out a refund in your favour.

The ATO pays these refunds electronically into your nominated bank account. To receive one, you must give the ATO your financial institution details — the account your refund should go to. The ATO explains the account generally needs to be at an Australian branch and held in your business or trading name.

A refund is not always paid straight out in full. The ATO may:

Hold the refund for a period — for example, while it checks the figures, or if it does not have your bank details on record.
Offset the refund against other tax you owe. The ATO can use all or part of a refund to reduce another debt. For a business, a GST credit might be used to reduce an income tax debt, for instance.

On timing, the ATO aims to process most electronically lodged statements within a set number of business days. Once a refund is processed, it can take a few more business days to reach your account, depending on your bank. If the ATO does not have your bank details, the refund can be delayed while they contact you to get them.

For accountants & bookkeepers

Refunds issue by electronic funds transfer to the client's nominated financial institution account, which generally must be at an Australian branch and held in the entity's name. Where the ATO holds a refund for verification or lacks financial institution details, timing extends; from 1 January 2025 the ATO has discretion to retain certain refunds for a period where it does not hold those details, and may ultimately issue by cheque if they are not provided. Refunds may be offset against debts, including debts on another account.

Example¶

Jordan is starting a small online homewares business. In the first quarter, there are lots of setup purchases — stock, a laptop, packaging, a website — and only a handful of early sales. The GST credits on all those purchases come to more than the small amount of GST Jordan collected.

Jordan's BAS works out a refund. Because Jordan already gave the ATO the business bank account details, the refund is paid electronically into that account a few business days after it is processed. No cheque, no waiting on the post.

A friend, Priya, is expecting a refund too, but she has an older income tax amount owing on another account. The ATO uses part of her refund to reduce that debt first, so the amount that reaches her bank account is smaller than the refund on her statement.

Common mistakes¶

Not giving the ATO your bank details — without them, the refund can be delayed.
Expecting a cheque — refunds are paid electronically into your nominated account.
Being surprised the amount is smaller — a refund can be offset against other tax you owe.
Expecting the money instantly — allow processing time, plus a few days for your bank.

How this works in myaccountant¶

In the app — when you lodge, myaccountant shows the outcome for that statement. If the figures work out in your favour, it shows a refund result, so you can see that the ATO owes you for that period rather than the other way around.

Key points¶

A refund happens when your GST credits are more than the GST you collected (or the statement otherwise works out in your favour).
Refunds are paid electronically into your nominated bank account.
You must give the ATO your financial institution (bank) details to receive one.
A refund may be held while the ATO checks it or if it lacks your bank details.
A refund may be offset against other tax debts you owe.
Allow processing time, plus a few business days for your bank.

Learn next¶

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

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