Boosting Cash Flow for Employers
During the economic downturn associated with the coronavirus, the Government will provide tax-free cash flow boosts of between $20,000 and $100,000. This will be done through two sets of cash flow boosts delivered from 28 April 2020 to support employers to retain employees.
Eligibility
You will be eligible to receive the cash flow boost if you are a small or medium business entity, including not-for-profit organisations, sole traders, partnership, company or trust that:
- held an ABN on 12 March 2020 and continues to be active
- has an aggregated annual turnover under $50 million (generally based on prior year turnover)
- made eligible payments you are required to withhold from (even if the amount you need to withhold is zero)
Eligible payments include:
- salary and wages
- director fees
- eligible retirement or termination payments
- compensation payments
- voluntary withholding from payment to contractors
In addition, you must also have either:
- derived business income in the 2018-19 income year and lodged your 2019 tax return on or before 12 March 2020
- made GST taxable, GST-free or input-taxed sales in a previous tax period (since 1 July 2018) and lodged the relevant activity statement on or before 12 March 2020
Initial Cash Flow Boost
The initial cash flow boost will be delivered as a credit in your ATO activity statement account when you lodge your March BAS. This will be applied from the Government’s announced date of 28 April.
If you lodge your BAS quarterly, you will be eligible to receive the credit for quarter 3 (March 2020) and quater 4 (June 2020) periods. If you lodge monthly, you will be eligible to receive the credit for the March 2020, April 2020, May 2020 and June 2020 periods.
Additional Cash Flow Boost
Eligible entities who receive the initial cash flow boost wil receive an additional cash fow boost, for the period June to September 2020, equal to the total amount of the initial boost received.
How to apply
No application is necessary. The cash flow boost is a tax fee payment to employers and is automatically calculated by the Australian Taxation Office when you lodge your BAS.
You can download this fact sheet for more information that includes examples to help better understand how the Cash Flow Boost will work.
