Case Study: Cash Flow Assistance – Monthly PAYG Remittance

Case Study: Cash Flow Assistance – Monthly PAYG Remittance

Boosting Cash Flow for Employers

The Government is providing up to $100,000 to eligible small and medium sized businesses, and not-for- profits (including charities) that employ people, with a minimum payment of $20,000. These payments will help businesses’ and not-for-profits’ cash flow so they can keep operating, pay their rent, electricity and other bills and retain staff.

On 12 March 2020, the Government announced the Boosting Cash Flow for Employers measure. The measure initially provided up to $25,000 to business, with a minimum payment of $2,000 for eligible businesses. Small and medium sized business entities with aggregated annual turnover under $50 million and that employ workers are eligible.

The Government has enhanced this measure as part of the second economic response package.

Case Study: 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. Sarah reports withholding of $15,008 for her employees on each of her monthly Business Activity Statements (BAS).

Under the Government’s changes, Sarah will be eligible to receive the payment on lodgment 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.

    Under the previously announced Boosting Cash Flow for Employers measure, Sarah’s business would have received a maximum payment of $25,000.

    Under the Government’s enhanced Boosting Cash Flow for Employers measure, Sarah’s business will receive $100,000. This is an additional $75,000 to support her business and help her retain her staff.

Critical Dates & Timing

Boosting Cash Flow for Employers

Type of Lodger Eligible Period Lodgement Due Date
Monthly

March 2020

April 2020

May 2020

June 2020

21 April 2020

21 May 2020

21 June 2020

21 July 2020

The Boosting Cash Flow for Employers payment will be applied to a limited number of activity statement lodgements.  Monthly lodgers will be eligible to receive the payment for the March 2020, April 2020, May 2020 and June 2020 lodgments. To provide a similar treatment to quarterly lodgers, the payment for monthly lodgers will be calculated at three times the rate (300 per cent) in the March 2020 activity statement. The minimum payment will be applied to the entities’ first lodgment.

Additional Payment

Type of Lodger Eligible Period Lodgement Due Date
Monthly

June 2020

July 2020

August 2020

September 2020

21 July 2020

21 August 2020

21 September 2020

21 October 2020

The additional payment will be applied to a limited number of activity statement lodgments. The ATO will deliver the payment as a credit to the entity upon lodgment of their activity statements. Where this places the entity in a refund position, the ATO will deliver the refund within 14 days. Monthly lodgers will be eligible to receive the additional payment for the June 2020, July 2020, August 2020 and September 2020 lodgments. Each additional payment will be equal to a quarter of their total initial Boosting Cash Flow for Employers payment (up to a total of $50,000).

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Source: www.treasury.gov.au

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