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PAYGW Cash Boost Calculator
For businesses, navigating the COVID-19 pandemic is difficult and understanding the different measures brought in by the government in the stimulus packages presents its own unique challenges. One crucial measure implemented is the Pay as you Go Withholding (PAYGW) Rebate/Cash Boost. This aims to help alleviate the financial strain on businesses during this difficult time, with a view to helping as many business owners as possible survive this. Below are the details on the COVID-19 PAYGW Cash Boost/Rebate, and a link to our FREE calculator, where you can input your reporting frequency, wages and PAYGW information, and the calculator will show you your estimated PAYGW Withholding Stimulus amount.
Initially announced in the first government stimulus, a $25,000 PAYGW Rebate was announced to apply for the March and June quarters. This was a minimum rebate of $2,000 and a maximum $25,000 rebate (not cash refund) equal to 50% of the PAYGW. If the employer has employees but PAYGW withholding is nil the minimum rebate was $2,000. This has now been revised as a part of phase 2, and now looks like this: The rebate for March and June is doubled from $25,000 to $50,000 (in total), AND based on 100% of PAYGW rather than 50%.
If an employer has nil PAYGW, the minimum cash payment has increased from $2,000 to $10,000.
A cash refund has been added for June and September equal to 50% of the amount received under phase 1 of the stimulus (per quarter).
As an example, an employer that pays $35,000 PAYGW per quarter will have the following stimulus:
Phase 1 – PAYGW Rebate
- $35,000 PAYGW rebate (March quarter)
- $15,000 PAYGW rebate (June quarter) as $50,000 cap is reached
Phase 2 – PAYGW Cash Bonus
- $25,000 cash payment for June quarter i.e. 50% of PAYGW rebates
- $25,000 cash payment for September quarter i.e. 50% of PAYGW rebates
Total stimulus $100,000
As an example, an employer with wages but NIL PAYGW will have the following stimulus:
Phase 1 – PAYGW Rebate
- $10,000 PAYGW rebate (March quarter)
- $0 PAYGW rebate as $10,000 cap paid applies in March (in full)
Phase 2 – PAYGW Cash Bonus
- $5,000 cash payment for June quarter i.e. 50% of PAYGW rebates
- $5,000 cash payment for September quarter i.e. 50% of PAYGW rebates
Total stimulus $20,000.
Note: There is currently no guidance on whether Gross wage needs to be greater than $10,000 before the rebate can be received in full.
Other points:
- The business must have had employees before 12 March 2020.
- The rebate/cash payment applies to businesses with an aggregated turnover of up to $50m.
- The cash payments received are tax free.
- The business must continue to remain active in June/September to have entitlement to the cash payments.
- The cash stimulus is applied as an automatic “CREDIT” for the June/September Activity Statement lodgements. This suggests that if there is an existing debt or the BAS is not paid in full then a cash payment would not be forthcoming.
- Do not forget superannuation guarantee obligations, which will still stand and ineligible for the amnesty which only applies for SGC up to 31 March 2018. This may be extended, but at this point in time no announcements have been made in this regard.
Basically, to access the PAYGW stimulus, you simply need to lodge your activity statements as normal, the rebates and cash stimulus should then be applied automatically.