Covid-19 Relief for Australian businesses
The Australian Federal Government’s economic response has been created to help you manage short-term cash flow challenges, retain your employees, and support business continuity. Here’s a breakdown of what’s on offer and some info on how to apply.
This is one of a collection of articles we’ve created here at Timely with tools and information that you can use to help your business during COVID-19. Visit our COVID-19 resource hub to see more.
At the time of writing this article salons and beauty businesses can remain open for business as long as safe client practices are followed.
How do I know if my practices are safe?
The Australian Government offer an online course called COVID-19 Infection Control Training which provides guidance on safe practices.
The Australian Federal Government’s economic response has been created to help you manage short-term cash flow challenges, retain your employees, and support business continuity. Here’s the latest breakdown of what’s on offer and some info on how to apply.
Cashflow assistance for business
Boosting cash flow for employers
The purpose of this is to help businesses manage cash flow challenges as a result of the economic impacts of COVID-19, and help businesses retain their employees. It will provide up to $100,000 back to small and medium-sized businesses, with a minimum payment of $20,000 for eligible businesses. The payment will be tax-free, and provide cash flow support to businesses with a turnover of less than $50 million that employ staff.
The Australian Taxation Office (ATO) will deliver the payment as a credit to the business once they’ve lodged their activity statements.
Businesses will receive a payment equal to 100% (increased from 50%) of the amount withheld from your employees’ wages up to a maximum of $100,000 (increased from $25,000).
Employers will receive a payment equal to 100% of the PAYG withheld from their employees’ wages up to a payment limit of $50,000. An additional payment will be introduced during the July – October 2020 period and employers will receive an additional payment equal to the amount already received in equal proportions across the relevant BAS periods.
The first payment will be delivered by the ATO as a credit in your activity statement from 28 April 2020 and depending on the activity statement lodgement cycle of your business, you will receive the credits for the following months:
- Quarterly – March 2020 and June 2020
- Monthly – March 2020, April 2020, May 2020 and June 2020
- If you are a monthly lodger, the payment will be calculated at six times the rate (300 %) in the March activity statement up to a maximum payment of $50,000.
Certain businesses which are registered for PAYG but are not required to withhold from their employees’ salaries can receive a minimum payment of $20,000 (increased from $2,000).
For companies reluctant to borrow, the Commonwealth is also offering to guarantee unsecured loans of up to $250,000 for a term of up to three years.
The Government is supporting small businesses to keep apprentices and trainees. Eligible employers can apply for a wage subsidy of 50% of the apprentice’s or trainee’s wage for up to 9 months from 1 January 2020 to 30 September 2020. If a small business isn’t able to keep an apprentice, the subsidy will be available to a new employer that employs that apprentice.
Employers will be reimbursed up to a maximum of $21,000 per eligible apprentice or trainee ($7,000 per quarter).
The Government will guarantee 50% of new unsecured loans for businesses with turnover under $50 million. The Government will provide eligible lenders with a guarantee for loans with the following terms:
- Maximum total size of loans of $250,000 per borrower.
- The loans will be up to three years, with an initial six month repayment holiday.
- The loans will be in the form of unsecured finance, meaning that borrowers will not have to provide an asset as security for the loan.
Supporting investment in your business
If your cash balance is healthy, the government has also introduced relief for businesses to continue investing in their business.
Increasing the instant asset write-off
The threshold for writing off assets has increased to $150,000 (from $30,000), which is available up until 30 June 2020.
Backing business investment
This offers businesses a time-limited incentive to invest, by accelerating depreciation deductions. Businesses with a turnover of less than $500 million will be able to deduct 50% of the cost of an eligible asset on installation, up until 30 June 2020.
Not sure if you’re eligible? Check with your accountant.
NSW – Payroll tax will be waived for the remainder of the year for businesses with a payroll of up to $10m.
TAS – If you’re required to self-isolate you’ll receive one-off payments of up to $1,000. Interest-free loans will be provided to the hospitality, tourism, seafood and exports sector [do our customers qualify?]. Payroll tax will be waived for the remainder of the year.
QLD – Payroll tax will be deferred for businesses with more details to follow. There is also an interest free loan facility available to small businesses. Learn more.
WA – Payroll tax paying businesses with a payroll between $1 million and $4 million will receive a one-off grant of $17,500. $1 million payroll tax threshold brought forward by six months to July 1, 2020. Small and medium sized businesses affected by COVID-19 can now apply to defer payment of their 2019-20 payroll tax until July 21 2020. Learn more.
VIC, NT and ACT – at the time of writing there was no state specific relief available.