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Cash Flow Boost for Business - PAYG Withholding

Written by Sarah Pogson . April 05, 2020
4 min read

To support businesses accross Australia with the impact of COVID-19, the Federal Government as a part of it's first stimulus package introduced new measures allowing eligible businesses to access cash flow support with eligible employers receiving a credit for PAYG Withholding in their Business Activity Statements.

Below we will outline the measure, provide relevant resources and help you understand your eligibility.

See above for the most recent resources available from Treasury. This resource provides an overview of the measure, including examples to help gain an understanding on how the measure can be applied to your business.

What Assistance Is Available?

Eligible employers can now access up to $100,000 if they are an eligible small or medium-sized business or a not-for-profit with turnover under $50 million.
Businesses who are registered for PAYG Withholding as at 12 March 2020 will receive a minimum of $20,000 in form of a credit in their Business Activity Statements (BAS) between March and October 2020.

This credit amount will reduce your PAYGW liability (W2 label in your BAS). Any additional credit will be offset against any other liability as a result of that BAS (e.g. GST). Any additional credit available will then be refunded to your bank account (similar to a GST refund).

When & What Will I Receive?

Your credit entitlement is dependent on your BAS lodgement cycle. The credits are also split in to two eligible periods - Pre 30 June 2020 and Post 30 June 2020.

  • Pre 30 June 2020 Entitlements - Monthly Lodgers
    If eligible, you will receive an automatic credit in your March 2020 BAS equal to 300% of the PAYG Withholding (W2 Label), up to $50,000.
    If 300% doesn’t equate to the maximum $50,000, you will receive additional credits in your April, May & June 2020 BAS until you reach the cap of $50,000.

  • Pre 30 June 2020 Entitlements - Quarterly Lodgers
    If eligible, you will receive an automatic credit in your March and June 2020 BAS, equal to 100% of the PAYG Withholding (W2 Label), up to $50,000.
    Note: The value of credit you receive in BAS pre 30 June 2020 is known as your "initial cash flow boost".

  • Post 30 June 2020 Entitlements - Monthly Lodgers
    If your employing entity continues to be active, you will receive a credit in your BAS equal to 25% of your initial cash flow boost in your June, July, August and September 2020 BAS, capped at $50,000.

  • Post 30 June 2020 Entitlements - Quarterly Lodgers
    If your employing entity continues to be active, you will receive a credit in your BAS equal to 50% of your initial cash flow boost in your June and September 2020 BAS withheld, capped at $50,000.

A reminder that employers who do not withhold over $20,000 will automatically receive $20,000 as a minimum repayment if their total withholding does not reach $50,000 over the eligible periods.

More information on the cash flow assistance for businesses is available here.

If you would like to discuss any of these measures and what they mean for you and your business, contact one our trusted team members on (02) 4229 2211 or get in touch with us online.

*The above information was correct at the time of publishing and subject to change*
Written by Sarah Pogson . April 05, 2020
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