As a result of the stimulus measures announced over the last month or so, many businesses will start receiving payments from the Federal or State Government.  It is important that these payments are accounted for correctly.

Cash flow boost

The COVID-19 cash flow boost for businesses are tax free and not subject to GST. These should be recognised separately in your accounting software.

We suggest creating an ‘Other income’ account narrated ‘Cash-flow boost’. This account should be set up as ‘BAS Excluded’ or ‘Non-reportable’. This will ensure that they are not reported as income.

The amount of the cash flow boost recorded as ‘Other income’ should represent the gross amount of the cash flow boost received.  The business should ensure that GST amounts, PAYG withholding expense and PAYG income tax instalments are also recognised in full.

JobKeeper payments

JobKeeper payments are assessable income of the business that is eligible to receive the payments. They are not subject to GST. These payments should be recognized separately in your accounting software.

We suggest creating an ‘Other income’ account narrated ‘JobKeeper payments’. This account should be set up as ‘BAS Excluded’.

South Australian $10,000 emergency cash grant

Where businesses receive the $10,000 emergency cash grant from the South Australian government, it should also be recorded separately in your accounting software.

The grant is likely to be considered to be taxable income to your business but will not be subject to GST.  We suggest creating an ‘Other income’ account narrated ‘SA stimulus grant’. This account should be set up as ‘BAS Excluded’.