Boosting Cash Flow Payments for employers – Eligibility and how it all works

To find out if you are eligible to receive a cash boost of up to $100,000

What is the cash boost for employers?

Small and medium sized businesses and not for profit entities, with an aggregated annual turnover of less than $50 million ( usually based on their prior year’s turnover) that employ people, may be eligible to receive a total payment of up to $100,000 (with a minimum total payment of $20,000.

How do I know if I am eligible?

A business (including a charity or not-for-profit) will be eligible for the cash flow boost if it meets the following conditions.

  1. The business must make a payment that is subject to the withholding tax provisions – e.g. salary or wages.
  2. The business must be one of the following:
    (a) a small business entity – has an aggregated turnover of less than $10 million
    (b) a medium business entity – has an aggregated turnover of less than $50 million
    (c) a charity or other not-for-profit entity of an equivalent size.The legislation tests turnover for the most recent income year that the business has received an income tax notice of assessment. 
  3. The business must have notified the Commissioner of the payment that was subject to withholding tax in the approved form. This will usually be done by lodging the relevant Business Activity Statement (BAS)
  4. The payment must relate to either:
    (a) for monthly withholders – the months of March 2020, April 2020, May 2020 or June 2020
    (b) for quarterly withholders – the quarters ending March 2020 or June 2020.
  5. The business must have held an ABN on 12 March 2020
  6. The business must have either:
    (a) derived assessable income from carrying on a business in the 2019 income year
    (b) made supplies in the course of carrying on its enterprise within Australia after 1 July 2018 and before 12 March 2020.

Do I need to register?

No, you do not need to register. The relevant information will be determined from the lodgement of the relevant Activity Statements (see below) if you meet the eligibility requirements set out above.

How much will I receive?

The minimum amount for each cash flow boost is $10,000 – so $20,000 in total. The maximum cap for each cash flow boost is $50,000 – so $100,000 in total.

Subject to the minimum amount and maximum cap, the cash flow boost is 100% of the amount that has been withheld for the period.

However, if the payment is for the month (not quarter) of March 2020, the cash flow boost is 300% of the amount that has been withheld. This means there is no difference between monthly and quarterly reporting.This means that:• quarterly lodgers will be eligible to receive the payment for the quarters ending March 2020 and June 2020; and• monthly lodgers will be eligible to receive the payment for the March 2020, April 2020, May 2020 and June 2020 lodgements.

What are the stages of payment?

There are two cash flow boosts which will be paid in 2 stages. 

Stage 1 payment – Commencing from the lodgement of activity statements from 28 April 2020, eligible employers that withhold PAYG tax on their employees’ salary and wages will receive a tax – free payment equal to 100% of the amount withheld,up to a maximum of $50,000. Eligible employers that pay salary and wages will receive a minimum tax-free payment of $10,000, even if they are not required to withhold PAYG tax.

Stage 2 payment – For employers that continue to be active, an additional (tax- free) payment will be available in respect of the June to October 2020 period, basically as follows:• Quarterly lodgers will be eligible to receive the additional payment for the quarters ending June 2020 and September 2020, with each payment being equal to 50% of their total initial (or Stage 1) payment (up to a maximum of $50,000).• Monthly lodgers will be eligible to receive the additional payment for the June 2020, July 2020, August 2020 and September 2020 activity statement lodgements, with each additional payment being equal to a quarter of their total initial (or Stage 1) payment (up to a maximum of $50,000).The ATO will automatically calculate and pay the additional (tax -free) payment as a credit to an employer upon the lodgment of their activity statements from July 2020, with any resulting refund being paid to the employer.

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