Australian federal and state/territory governments have announced economic stimulus packages for businesses impacted by the coronavirus (COVID-19) outbreak.
This article details the government financial support available for your business, so you can keep it running during the pandemic.
Federal government financial support
The federal government’s stimulus package focuses on cash flow support through special payments and tax relief. Additional measures are available for businesses that employ workers to save jobs.
Cash flow boost for employers
Small and medium-sized businesses that employ staff, and have an aggregated turnover under $50 million based on prior year turnover, will be eligible for a special payment.
You can receive a payment equal to 100% of the amount withheld on employee’s salary and wages, up to a maximum of $50,000.
If you pay salary and wages but don’t withhold tax, you could still receive a minimum payment of $10,000.
The payment will be delivered as a credit in the activity statement system from 28 April when businesses lodge activity statements.
An additional payment of equal amount is planned for the July to October 2020 period — but your business must remain active in order to qualify.
More details of the payment, including how it will work for quarterly and monthly lodgers, can be found on the business.gov.au site.
Subsidy for paying apprentices or trainees
Small businesses with fewer than 20 full-time employees, as well as any sized employers who re-engage an eligible apprentice or trainee, could receive a 50% subsidy on the apprentice or trainee’s wages for nine months from 1 January 2020 to 30 September 2020. The maximum reimbursement is $7,000 per quarter.
Business support through tax relief
A range of coronavirus support is delivered by the ATO, including:
- Increasing instant asset write-off. From 12 March 2020 to 30 June 2020, businesses with aggregated turnover of less than $500 million can immediately write off the cost of each asset costing less than $150,000.
- Accelerated depreciation. Businesses with turnover of less $500 million can also accelerate their depreciation deduction, and deduct 50% of the cost of an asset on installation.
The Australian Taxation Office also offers additional relief options on a case-by-case basis:
- Payment deferrals. You can potentially defer your income tax, FBT and excise payment.
- Changing your GST reporting cycle. If you report GST quarterly and are due a refund, it may be worth changing your GST reporting and payment cycle from quarterly to monthly to receive your GST credits sooner.
- Varying PAYG instalments and getting refunds. If you are a PAYG instalment payer, you can apply to vary PAYG instalments and claim a refund for instalments made during the 2019–20 financial year.
Federal government support for businesses
Visit Sage’s dedicated hub to discover the full range of federal government financial assistance available for Australian businesses.
State/Territory government support
State and territory governments are also implementing separate economic survival packages to help businesses.
Australian Capital Territory
The ACT government announced that businesses using less than 100 megawatts of electricity per year will receive a $750 rebate on their June/July 2020 bill.
Payroll tax will be waived for hospitality, creative arts and entertainment industries.
ACT businesses with wages of up to $10 million can defer their 2020-21 payroll tax, interest free until 1 July 2022. Visit the ACT government site for the full list of support measures.
New South Wales
The NSW government announced that employers with payrolls over $10 million will have payroll tax deferred for six months. Additional relief is provided by bringing forward the payroll tax threshold increase.
A range of fees and charges will be waived for bars cafes, restaurants and tradies. Visit the NSW government site for the full list of support measures.
The Northern Territory government established the Small Business Survival Fund to make payments available for businesses impacted by physical distancing and shut down requirements. Visit the NT government site for the full list of support measures.
Financial assistance provided by the Queensland government includes payroll tax relief in one or more of the following ways:
- Refunds of payroll tax for two months;
- Payroll tax holiday for three months; and/or
- Deferral of paying payroll tax for 2020.
Coronavirus job support loans of up to $250,000 are also available. Interest free for the first 12 months, these loans are designed to help businesses remain open and retain staff.
Sole traders, small and medium-sized businesses consuming less than 100 megawatts of electricity will receive a $500 rebate on their electricity bill.
A number of fee waivers are available for tourism businesses.
Commercial tenants on government premises will receive six months of rent relief. Visit the Queensland government site for more information.
The South Australian government announced that employers with grouped wages up to $4 million could qualify for a six-month payroll tax waiver. Visit the South Australian government site for more information.
The Tasmanian government is providing loans from $20,000 up to $250 000 for eligible businesses.
Businesses with payrolls less than $5 million will have payroll tax waived for the entire 2019-20 tax year.
A $5,000 grant is available for a qualifying employer who hires an apprentice or trainee in the tourism, hospitality, building and construction, and manufacturing industries.
A range of fees for tourism operators and liquor licensing will be waived or discounted. Visit the Tasmanian government site for the full list of support measures.
In its Economic Survival Package factsheet, the Victorian government states payroll tax for the 2019-20 financial year will be waived for employers with annual taxable wages up to $3m. Payroll tax for the first quarter of 2020-21 can also be deferred.
Renewable liquor license fees will be waived for 2020.
Commercial tenants in government buildings could be granted rent relief.
The Western Australian government announced that small businesses with a payroll between $1 million and $4 million could receive a one-off grant of $17,500.
The payroll tax threshold increase to $1 million will be brought forward by six months to offer further relief. Small and medium-sized businesses can also apply to defer the payment of their 2019-20 payroll tax until 21 July 2020.
Visit the Western Australian government site for the full list of support measures.
Watch our virtual event: ‘Leading through the COVID-19 crisis’
On 26 May, we held our first Sage Advice Live virtual event. Watch our video to hear from our panel on how their businesses have navigated the challenges of COVID-19, what the future business landscape will look like, and tips on how you can survive and thrive.
You'll hear from:
- Cindy Nicholson, CEO, Braintree
- Mark Chapman, Tax Communications Director, H&R Block
- Danielle Wood, Program Director, Grattan Institute
- Kerry Agiasotis, MD & EVP APAC, Sage
- Mark Jones, Chief Storyteller & CEO, Filtered Media (Host)
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