Tax-Free Refund of PAYG Paid

Eligibility

The payment will provide cash flow support by way of a Tax-Free Refund of PAYG Paid to the businesses that:

  • have a turnover of less than $50 million in the year to 30 June 2019, and
  • that employ staff, between 1 January 2020 and 30 June 2020.

How it works

1st tier – Initial Payments

  • Businesses will receive an amount equal to 100% of the Pay As You Go (PAYG) tax that you deduct from wages for the 2 quarters ended 31 March 2020 and 30 June 2020.
  • The total of these 2 payments is called the “Initial Payments”. (See later).
  • The maximum is refund under this section is $50,000.
  • The minimum is $10,000 even if the amount that you withheld from employees’ wages in that 6 months is less than that.

2nd Tier – Additional Payments

  • If the business remains active through to 28th October 2020, then the 2nd tier of payments kicks in.
  • For the quarter ended 30 June 2020, 50% of the total “Initial Payments” for March and June quarters (maximum $25,000).
  • For the quarter ended 30 September 2020 – Identical 50% of the “Initial Payments” for March and June quarters (maximum $25,000).

Limits

A Tax-Free Refund of PAYG Paid with a minimum of $20,000 and a maximum of $100,000.

Tax free

This will be a tax-free payment.

How you’ll get paid

  • The ATO will deliver all of the payments as a credit to your business upon lodgement of your activity statements.
  • There are no new forms required.
  • If this creates a refund, the ATO will pay it to you within 14 days.

When

  • BAS Mar 2020 – due 28 Apr 2020       1st Initial payment
  • BAS Jun 2020 – due 28 Jul 2020         2nd Initial payment & 1st Additional payment
  • BAS Sep 2020 – due 28 Oct 2020       2nd Additional Payment
  • If a business lodges their BAS monthly, different timings apply.
  • The minimum payment will be applied to the business’ first lodgement.

Advice
If you need advice on the tax changes, you can contact Noel May or Amanda Klye of May Klye & Associates on (03) 9585 7555 or enquiries@mktax.com.au.

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