Case Study: Cash Flow Assistance – Quarterly PAYG Remittance

Case Study: Cash Flow Assistance – Quarterly 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: 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 lodgment 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 with holding tax for the June quarter, he would need to withhold more than $10,000 before he receives any additional payment.

Under the previously announced Boosting Cash Flow for Employers measure, Tim’s business would have received a total payment of $2,000.

Under the Government’s enhanced Boosting Cash Flow for Employers measure, Tim’s business will receive $20,000. This is an additional $18,000 to support his business.

Critical Dates & Timing

Boosting Cash Flow for Employers

Type of Lodger Eligible Period Lodgement Due Date
Quarterly

Quarter 3 (Jan, Feb and Mar 2020)

Quarter 4 (April, May and June 2020)

28 April 2020

28 July 2020

The Boosting Cash Flow for Employers payment will be applied to a limited number of activity statement lodgements. Quarterly lodgers will be eligible to receive the payment for the quarters ending March 2020 and June 2020.

Additional Payment

Type of Lodger Eligible Period Lodgement Due Date
Quarterly

Quarter 4 (April, May and June 2020)

Quarter 1 (July, Aug and Sept 2020)

28 July 2020

28 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.  Quarterly lodgers will be eligible to receive the additional payment for the quarters ending June 2020 and September 2020. Each additional payment will be equal to half 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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