What benefits will be provided to Small and Medium Employers and Not-for-Profit Businesses (including Charities) by the Government During COVID-19

To assist eligible small and medium sized businesses and not-for-profits (including charities) that employ people the ATO are proposing the following payments:

• * Initial Boosting Cash Flow Payment with a minimum payment of $10,000 and a maximum payment of $50,000
• * Additional Boosting Cash Flow Payment with a minimum payment of $10,000 and a maximum payment of $50,000

Who is eligible to receive the Boosting Cash Flow payment?

Small and medium sized business entities and Not-for-Profits (including Charities) who are active eligible employers established prior to 12 March 2020 and have an annual turnover under $50 million (generally based on prior year turnover) will be eligible for this proposed payment. 

• QUARTERLY BAS

I’m an employer that pays wages, withholds PAYGW and I lodge my BAS on a quarterly basis; am I entitled to the Initial Boosting Cash Flow Payment and when will I receive the payments?

• * You will be eligible to receive the Initial payment which is equal to 100 per cent of the amount withheld and up to a maximum payment of $50,000.  There will be a minimum payment of $10,000 when the March BAS is lodged.
• * The Initial payment will be applied to your activity statement account from 28 April 2020 upon lodgement of your next BAS.  Where this payment places your account into a refund position, the ATO aim to deliver the refund within 14 days.

I’m an employer that pays wages, withholds PAYGW and I lodge my BAS on a quarterly basis; am I entitled to the Additional Boosting Cash Flow Payment and when will I receive the payments?

• * To qualify for the Additional payment, you must continue to be an active employer.
• * This Additional payment will be equal to half of your total Initial payment, up to $50,000, and will be applied to your activity statement account following the lodgement of your June 2020 and September 2020 activity statements.  Where this payment places your account into a refund position, the ATO aim to deliver the refund within 14 days.

Example:

Pete’s Plumbing

Pete’s Plumbing employs 5 part time workers with average income of $30,000 per year. It reports total withholding of $3,510 for its employees for each quarterly BAS. 

Under the Government’s changes, Pete’s Plumbing will be eligible to receive the payment on lodgement of its BAS. Pete’s Plumbing receives:

A credit of $10,000 for the March quarter, the minimum payment.

An additional payment of $5,000 for the June quarter, equal to 50 per cent of its total Boosting Cash Flow for Employers payments.

An additional payment of $5,000 for the September quarter, equal to 50 per cent of its total Boosting Cash Flow for Employers payments.

• 2)  MONTHLY BAS

I’m an employer that pays wages, withholds PAYGW and I lodge my BAS on a monthly basis; am I entitled to the Initial Boosting Cash Flow Payment and when will I receive the payments?

• * You will be eligible to receive the Proposed Initial Boosting Cash Flow payment which is equal to 100 per cent of the amount withheld, up to a maximum payment of $50,000. Your March BAS PAYG withheld will be calculated at 300 per cent, to ensure similar treatment to the quarterly lodgers.  There will be a minimum payment of $10,000 when the March BAS is lodged.
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• * This Proposed Initial Payment will be applied to your activity statement account from 28 April 2020 upon lodgement of your next BAS.  Where this payment places your account into a refund position, the ATO aim to deliver the refund within 14 days.
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I’m an employer that pays wages, withholds PAYGW and I lodge my BAS on a monthly basis; am I entitled to the Additional Boosting Cash Flow Payment and when will I receive the payments?

• * To qualify for the Proposed Additional payment, you must continue to be an active employer.
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• * This proposed Additional payment will be equal to a quarter of your total Initial payment, up to $50,000, and will be applied to your activity statement account following the lodgement of your June 2020, July 2020, August 2020 and September 2020 activity statements.  Where this payment places your account into a refund position, the ATO aim to deliver the refund within 14 days.

Example:

Sarah’s Construction Business

Sarah owns and runs a building business in South Australia and employs 8 construction workers on average full-time weekly earnings who each earn $89,730 per year. In the months of March, April and June for the 2019-20 income year, Sarah reports withholding of $15,008 for her employees on each business activity statement (BAS).

Under the Government’s changes, Sarah will be eligible to receive the Boost on lodgement of each of her BAS. Sarah’s business receives:

* A credit of $45,024 for the March period, equal to 300 per cent of her total withholding.
* A credit of $4,976 for the April period, before she reaches the $50,000 cap.
* No payment for the May period, as she has now reached the $50,000 cap.
* An additional payment of $12,500 for the June period, equal to 25 per cent of her total Boosting Cash Flow for Employers payments.
* An additional payment of $12,500 for the July period, equal to 25 per cent of her total Boosting Cash Flow for Employers payments.
* An additional payment of $12,500 for the August period, equal to 25 per cent of her total Boosting Cash Flow for Employers payments.
* An additional payment of $12,500 for the September period, equal to 25 per cent of her total Boosting Cash Flow for * Employers payments.

• EMPLOYER WITH NO PAYGW

I’m an employer that pays wages, however I am NOT required to withhold PAYGW; am I entitled to any payments and when will I receive the payments?

You will be eligible to receive the proposed minimum initial payment of $10,000.  This payment will be applied to your activity statement account from 28 April 2020 upon lodgement of your next BAS.  Where this payment places your account into a refund position, the ATO aim to deliver the refund within 14 days.

You will also be eligible to receive the proposed additional payment which will be equal to half of your total Initial payment, up to $10,000, and will be applied to your activity statement account following the lodgement of your June 2020 and September 2020 activity statements.  Where this payment places your account into a refund position, the ATO aim to deliver the refund within 14 days.

Example:

Tim’s Courier Run

Tim owns and runs a small paper delivery business in Melbourne and employs two casual employees who each earn $10,000 per year. In his quarterly BAS, Tim reports withholding of $0 for his employees as they are under the tax-free threshold. 

Under the Government’s changes, Tim will be eligible to receive the payment on lodgement of his BAS.

Tim’s business will receive:

• * A credit of $10,000 for the March quarter, as he pays salary and wages but is not required to withhold tax. 
• * An additional payment of $5,000 for the June quarter, equal to 50 per cent of his total Boosting Cash Flow for Employers payments.
• * An additional payment of $5,000 for the September quarter, equal to 50 per cent of his total Boosting Cash Flow for Employers payments.
• * If Tim begins withholding tax for the June quarter, he will need to withhold more than $10,000 before he receives any additional payment.**