Coronavirus and cash flow: measures to boost cash flow for employers
March 24, 2020
The federal government is providing eligible small and medium-sized businesses that employ workers up to $100,000 to help boost cash flow.
The national, state and territory governments have released numerous financial initiatives to help businesses and workers through the coronavirus pandemic.
The federal government initially announced that they were providing up to $50,000 to eligible small and medium-sized businesses via their ‘Boosting Cash Flow for Employers’ payments last week.
However, it has since been announced that this fund will be doubled, increasing the minimums that businesses will be able to access.
How the payment works
Eligible businesses will now be able to receive a credit to their account for an amount equal to 100 per cent (up from 50 per cent) of their ‘pay as you go’ withholding from wages of up to $50,000, increased from $25,000.
The minimum amount that eligible businesses will receive is now $10,000, increased from $2,000.
No additional action is required by businesses to access this stimulus, apart from lodging their Business Activity Statements (BAS) as normal. The government will use the BAS to distribute the funds.
The following will apply to both the March 2020 and June 2020 quarters, however the $50,000 maximum will apply for the period.
For example, if you pay $35,000 in withholding on your March BAS, you will be able to receive up to $15,000 in your June quarter, taking the maximum payments to $50,000.
The government has also announced that, for the July to September period, eligible businesses will receive a further payment equal to the total of ‘Boosting Cash Flow for Employers’ payments that they had previously received.
This will mean eligible entities can receive up to $100,000, with a minimum received of $20,000.
Eligible businesses are small to medium-sized enterprises with a turnover of under $50 million that employs workers.
If you want to learn more about the ‘Boosting Cash Flow for Employers’ payments and what they could mean for your business, then the team at LDB can help.
Our trusted advisors will help you understand all of the new financial measures and what applies to your business specifically. Just give us a call on (03) 9875 2900 or send us a message via the contact form below.