Australian tax rules create specific modelling challenges that affect cash flow timing. GST, PAYG withholding, superannuation guarantee, FBT, and company tax each follow different payment schedules. Getting these right in your Excel model means your cash flow projections reflect actual timing rather than smoothed averages.

This post covers how to handle each tax element in your financial models, with practical Excel approaches you can implement today.

GST in Financial Models: Timing Is Everything

The Core Problem

GST is collected on most sales and paid on most purchases, but the net amount is only remitted to or refunded by the ATO quarterly or monthly (monthly if GST turnover exceeds $20 million). This means every month's cash flow is affected by GST timing.

Consider a wholesale distribution business with $2 million annual turnover. They collect $200,000 in GST on sales over the year and pay $160,000 in GST on purchases. The net $40,000 is paid to the ATO quarterly. A monthly model that ignores this timing shows $3,333 in tax outflow every month. The real cash flow shows $0 in tax outflow for two months, then $10,000 in the third month. If the business uses that $3,333 monthly figure for cash management, they will consistently overstate their available cash in the first two months of each quarter and understate it in the third.

Modelling GST in Excel

Set up a GST section in your assumptions sheet with the following parameters:

• GST rate: 10% for most supplies, 0% for GST-free items such as basic food, health services, education, and residential rent
• GST on revenue: a toggle per revenue stream, because some products or services may be GST-free
• GST on expenses: a toggle per expense category, because wages and bank fees are GST-free
• BAS lodgement frequency: monthly or quarterly depending on your turnover
• Lodgement lag: typically one month after the end of each period

On your P&L sheet, calculate GST collected and GST paid for each period separately. In your cash flow section, show the net BAS payment or refund in the month it actually occurs, not spread evenly.

A common shortcut is to adjust revenue and expenses to GST-inclusive amounts in the cash flow section. This works but makes it harder to reconcile to the P&L, which is GST-exclusive. A cleaner approach is to keep the P&L GST-exclusive and add a separate GST reconciliation sheet that feeds directly into the cash flow section. The extra sheet takes about fifteen minutes to set up and prevents reconciliation headaches later.

GST-Free Items Need Explicit Flags

Many models apply GST to everything, which overstates both revenue and expenses for businesses with significant GST-free income. Health services, education, financial services, and residential rent are common income streams that do not attract GST. On the expense side, wages, bank fees, and insurance premiums are GST-free.

Flag each revenue and expense line in your assumptions sheet so the GST calculation is accurate. A simple column labelled "GST applies" with a yes/no dropdown is sufficient. The formula then references that flag when calculating GST amounts.

PAYG Withholding: Accrual vs Cash Timing

PAYG withholding is tax deducted from employee wages and remitted to the ATO. It does not affect the P&L because the gross wage is the expense, and the withholding is just a timing difference between when the wage is recognised and when the cash leaves the business.

Modelling the Cash Flow Timing

The PAYG withholding amount is calculated from each employee's tax table and applied to their gross pay. For modelling purposes, you need an effective withholding rate rather than modelling each employee individually:

• Average rate: 15 to 25% of gross wages depending on your workforce composition
• Payment frequency: monthly if total withholding exceeds $25,000 per year, quarterly otherwise
• Payment due date: the 21st of the following month for monthly filers, or the 28th day after quarter end for quarterly filers

In your model, accrue PAYG withholding each pay period but show the cash outflow on the actual payment date. This creates a working capital timing difference that matters most in growth periods. A business that adds five staff in a single month will see wages expense increase immediately, but the PAYG withholding cash outflow will lag by up to a month.

PAYG Instalments Are Different

PAYG instalments are quarterly prepayments of income tax calculated by the ATO based on your prior year tax return or your own estimate. These apply to businesses with consistent profitability above the ATO threshold. For most SME models, PAYG withholding is the relevant line item. PAYG instalments only need modelling once the business generates taxable profit above the ATO's varied instalment threshold, which is typically around $2,000 of annual tax liability.

If your business does pay instalments, model them as quarterly cash outflows with timing aligned to the ATO's schedule: usually 28 days after each quarter end, similar to BAS.

Superannuation Guarantee: The Quarterly Spike

The superannuation guarantee rate is 11.5% of ordinary time earnings as at 2026, payable quarterly. The payment due date is 28 days after the end of each quarter:

• Quarter 1 (July to September): due October 28
• Quarter 2 (October to December): due January 28
• Quarter 3 (January to March): due April 28
• Quarter 4 (April to June): due July 28

What This Means for Your Model

A monthly model that accrues super each period but shows the cash outflow in the payment month reveals a significant working capital requirement. In October, the cash outflow includes three months of accrued super. If your model spreads super evenly across twelve months, you will understate October's cash need by roughly two and a half times the monthly super amount.

A growing business that adds three to four staff over six months will face a quarterly super bill of $6,000 to $8,000 in the first month after quarter end. If the model spreads that evenly across twelve months, the cash flow says there is $6,000 available when the bank account shows $4,000.

The Excel Approach

In your monthly cash flow model, calculate super on each month's wages. Show the expense in the P&L each month, but in the cash flow section, accumulate the liability across three months and show one payment per quarter. A simple SUMPRODUCT formula referencing a helper column that flags payment months handles this cleanly.

Fringe Benefits Tax: When and How to Model It

FBT applies to non-salary benefits provided to employees or their associates - cars, entertainment, school fees, gym memberships. The FBT year runs from April 1 to March 31, and lodgement is due by June 30.

For most SME models, FBT is not material enough to model as a separate line. If the business provides vehicles as part of employment, which is common in trades and sales roles, estimate FBT at 5 to 10% of salary costs for those employees and model the payment in March and June each year.

If vehicles make up a significant portion of your compensation structure, model FBT more precisely. Calculate the taxable value of the car benefit using the statutory formula method (20% of the car's base value for most cars) and apply the FBT rate of 47% (as at 2026). The ATO publishes the statutory fraction rates annually, and they change periodically, so check the current rate when building your model.

Company Tax: Accrual vs Cash Timing Matters

The Australian company tax rate is 25% for base rate entities with aggregated turnover under $25 million and 30% for all other companies.

Tax is paid through PAYG instalments during the year, with a balancing adjustment after the tax return is lodged. This means the cash flow of tax differs significantly from the P&L tax expense. A business that had a strong prior year will have high PAYG instalments in the current year, even if current year profit is lower. The reverse is also true: a loss-making business in its first year pays no tax but will have low instalments to start the following year.

For a simple model, calculate tax expense on profit before tax at the applicable rate. For the cash flow, model quarterly instalments based on estimated current year tax divided by four, with the balance paid after year-end. If the business is growing quickly, use the prior year's tax as the instalment base and model a top-up payment when the return is lodged.

Putting It Together: A Practical Approach

Here is the simplest structure that handles all of these tax elements without becoming overly complex:

1. Assumptions sheet: GST rate, BAS frequency, SG rate, PAYG withholding rate, company tax rate, and FBT rate
2. P&L: GST-exclusive throughout for clean margin analysis
3. GST reconciliation: A separate sheet calculating GST collected and GST paid per period, net position, and BAS payment timing
4. Cash flow: Start with operating cash flow, then add GST settlement, PAYG payment, SG payment, and tax instalments as separate line items with correct timing

The extra complexity adds about thirty minutes to the model build but prevents cash flow errors that can mislead business decisions by 10 to 20% of actual cash position.

Further Reading

The financial modelling in Excel complete guide covers the overall model structure. For a practical example showing how these compliance elements fit into a model, the cash flow forecasting for growing SMEs post includes GST and BAS timing in its worked example.