Boosting Cash Flow for Employers will give up to $25,000 to ECEC

The Australian Government has announced a tax free temporary cash flow support measure for small and medium businesses that employ staff, to support with the economic impacts of COVID-19.

The Boosting Cash Flow for Employers measure will provide up to $25,000 back to business, with a minimum payment of $2,000 for eligible businesses. 

Eligibility

Small and medium business entities with aggregated annual turnover under $50 million and that employ workers will be eligible. Eligibility will generally be based on prior year turnover.

• The payment will be delivered by the Australian Taxation Office (ATO) as a credit in the activity statement system from 28 April 2020 upon businesses lodging eligible upcoming activity statements.
• Eligible businesses that withhold tax to the ATO on their employees’ salary and wages will receive a payment equal to 50 per cent of the amount withheld, up to a maximum payment of $25,000.
• Eligible businesses that pay salary and wages will receive a minimum payment of $2,000, even if they are not required to withhold tax.

This measure will benefit around 690,000 businesses employing around 7.8 million people, including those in the early childhood education and care sector.

Timing

The measure will be applied for a limited number of activity statement lodgments. The ATO will deliver the payment as a credit to the business upon lodgment of their activity statements. Where this places the business in a refund position, the ATO will deliver the refund within 14 days.

Quarterly lodgers will be eligible to receive the payment for the quarters ending March 2020 and June 2020. 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 (150 per cent) in the March 2020 activity statement.

The minimum payment will be applied to the business’ first lodgment. 

To review the information as provided by the Australian Government, including a variety of case studies which demonstrate how the measures can affect individual business types, please see here.