CoronaVirus Stimulus Assistance for Small Business

As you have heard on the News or radio.  The Australian Government has provided an Economic Response to the CoronaVirus pandemic that is currently traipsing the world.

This assistance is to support businesses and help manage cash flow challenges which will then in-turn assist in the retention of employees.

This stimulus is designed to support employing small and medium business and help improve business confidence.  In addition there is a wage subsidy for apprentices and trainees to help ensure the continued development of the skilled workforce needed.

Eligibility:

Small and Medium Enterprises with aggregated annual turnover under $50 million that employ workers are eligible.  Based on previous annual year turnover.

Its a rebate delivered by the ATO as a credit on your Activity statement from 28 April upon lodgment of your BAS Statement.

Eligible businesses that withhold tax to the ATO on their employees’ salary and wages will receive a payment equal to 50% of the amount withheld, up-to a MAX of $25,000.

Eligible businesses that pay salary and wages will receive a minimum rebate of $2,000, even if they are not required to withhold tax.

Timing:

The ATO will deliver the “refund” within 14 days of lodgment and the eligible periods are shown below. 

What does that mean in laymans terms?

Example 1:

Construction business with 9 employees on average full-time weekly earnings of $89,730 each per year.  In the months March, April, May, June for 2019-20 income year, the Construction business reported withholding of $15,008 for each BAS.  Under the changes, the government will be eligible to receive the payment on lodgment of each of their BAS .  The business receives

A payment of $22,512 for march period, equal to 150% of her total withholding

A payment of $2,488 for April period, before they reach the $25,000 cap

No payment for May as they have reached the $25,000 cap

No payment for June as they have reached the $25,000 cap.

Example 2:

Hairdresser employs one apprentice at $27,970 per year and two stylists both earning $44,260 per year.  In March and June 2020 quarterly BAS the withholding reported is $4570 for their employees. March and June Quarterly BAS $4,570 for employees was reported.  Under changes, they will be eligible to receive the payment on lodgment of the BAS.  The Business receives

A payment of $2,285 for March Quarter, equal to 50% of his total withholding

A payment of $2,285 for June Quarter, equal to 50% of his total withholding

A Total payment/rebate of $4,570.00

Example 3:

Courier Company employs 2 casual employees who each earn $10,000 per year.  March and June 2020 quarterly BAS withholding of $0 for employees as they were under the tax threshhold.  Under the Governments’ changes, they will be eligible to receive the payment on lodgement of the BAS.  The business will receive

A payment of $2000 for the March Quarter, as he pays salary and wages but is not required to withhold tax.

No payment for the June Quarter as he has already received the minimum payment and there is no withholding obligation.

If the business begins withholding tax for the June quarter – they will need to withhold more than $4,000 before they receive any additional Payment.

For more information on the Australian Government’s Economic Response to Coronavirus visit  treasury.gov.au/coronavirus

Businesses can also visit business.gov.au to find out more about how the Economic Response complements the range of support available to small and medium businesses.

Recommend0 recommendationsPublished in Business Tips, Small Business, Small Business Connect, Tax

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