Seeking to buffer businesses employing nearly 8 million Australians, Prime Minister Scott Morrison has announced a $6.7 billion cash bonus
plan as part of efforts to help employers keep on staff and maintain wages.
It is expected that this bill will be introduced into Parliament in the final sitting week in March 2020 (presumably 23 March 2020) for
urgent consideration and passage.
Firms with turnover below $50 million are eligible for the bonus from April 28, set to be delivered automatically through the Australian Tax Office from early May.
The Boosting Cash Flow for Employers measure will provide up to $25,000 back to businesses, with a minimum payment of $2,000 for eligible businesses to help them with wages, extra staff, investment and to support against the looming downturn. The payment will provide temporary cash flow support to small and medium businesses that employ staff. The payment will be tax free.
There are strategies to utilise this $25,000 cap that may be of benefit to your business. Please contact our office to discuss further how these incentives can benefit your business.
This measure will benefit around 690,000 businesses employing around 7.8 million people.
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 Boosting Cash Flow for Employers measure will be applied for a limited number of activity statement lodgements. The ATO will deliver the payment as a credit to the business upon lodgement of their activity statements.
|Type of Lodger
||Lodgement Due Date
Quarter 3 (Jan, Feb & Mar 2020)
Quarter 4 (Apr, May & Jun 2020)
28 Apr 2020
28 Jul 2020
21 Apr 2020
21 May 2020
22 Jun 2020
21 Jul 2020
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 lodgements. 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 lodgement.
Examples of how this payment can help your business
Kelly’s Construction Business
Kelly owns and runs a building business in Melbourne and employs 8 construction workers on average full-time weekly earnings who each earn $89,730 per year. In the months of March, April and June for the 2019-20 income year, Kelly reports withholding of $15,008 for her employees on each business activity statement (BAS).
Under the Government’s changes, Kelly will be eligible to receive the Boost on lodgement of each of her BAS. Kelly’s business receives:
Hayden’s Hairdresser Salon
Hayden owns a hairdresser's salon in Dandenong. He employs one apprentice who earns $37,970 per year and two stylists who both earn $44,260 per year. In the March and June 2020 quarterly BAS, Hayden reports withholding of $4,570 for his employees.
Under the Government’s changes, Hayden will be eligible to receive the payment on lodgement of his BAS.
Hayden’s business will receive:
Hayden’s business will receive a total payment of $4,570.
Hayden may also benefit from the assistance for existing apprentices and trainees measure.
David’s Courier Run
David owns and runs a small paper delivery business in Bayside, and employs two casual employees who each earn $10,000 per year. In the March and June 2020 quarterly BAS, David reports withholding of $0 for his employees as they are under the tax-free threshold.
Under the Government’s changes, David will be eligible to receive the payment on lodgement of his BAS.
David’s business will receive:
If David begins withholding tax for the June quarter, he would need to withhold more than $4,000 before he receives any additional payment.
Other incentives that have been offered by the Government include:
Wage subsidies to support the retention of apprentices and trainees – employers with less than 20 full-time employees may be eligible to receive a 50% subsidy to help cover an apprentice or trainee’s wage for up to 9 months from 1 January 2020 to 30 September 2020. If an employer is unable to retain an apprentice, the subsidy will be available to a new employer that employs that apprentice.
Registrations for this subsidy are expected to open early-April.
Increasing the instant asset write-off amount from $30,000 to $150,000 – assets costing $150,000 that are purchased and installed ready for use by 30 June 2020 will be eligible for immediate write-off. Businesses with an aggregated turnover of less than $500m will be eligible.
Accelerated depreciation deductions – a 15 month investment incentive whereby businesses can immediately deduct 50% of the cost of an eligible asset on installation, with existing depreciation rules applying to the balance of the asset’s cost. Businesses with an aggregated turnover of less than $500m will be eligible.
Please note, that these incentives still have to be passed through Parliament.