Cash Flow

As many small businesses across New Zealand face economic uncertainty as the global coronavirus pandemic bites, the New Zealand Government has promised wage subsidies and tax relief. Here’s what you need to know about the economic stimulus package.

COVID-19 NZ economic stimulus package

As governments across the world move to support their countries’ economies by pumping funds into them, New Zealand’s response has emerged among the most generous.

More than $12 billion has been pledged, or around 4% of annual GPD. Almost three-quarters of the funds are earmarked to support business and jobs, in two key ways: wage subsidies and tax relief.

Wage subsidies

The wage subsidies are aimed at any employers significantly impacted by COVID-19 and struggling to keep staff on as a result, as well as self-employed and sole traders.

The subsidy is worth $585.80 a week for a full-time employee or $350 for a part-time employee, paid as a lump sum covering 12 weeks. There is no cap on the amount paid to employers.

For example, if a Queenstown tourism operator with 20 permanent part-time employees saw a significant drop in forward bookings because of the travel ban, they could apply for the subsidy and receive up to $84,000 (20 part-time employees at $350 a week multiplied by 12 weeks).

Those funds would then be used to pay those employees for the next three months.

Tax relief

The has also been an increase in the threshold for an immediate deduction on asset purchases, an increase in the provisional tax threshold and a waiver on late tax payments.

Sign up to the Prospa Blog newsletter for more small business news and tips.

The information on this website is provided for general information only and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from financial, legal and taxation advisors. Although every effort has been made to verify the accuracy of the information as at the date of publication, Prospa, its officers, employees and agents disclaim all liability (except for any liability which by law cannot be excluded), for any error, inaccuracy, or omission from the information for any reason, including due to the passage of time, or any loss or damage suffered by any person directly or indirectly through relying on this information.

Recent Posts

Cash Flow
6 strategies to manage cash flow during COVID-19
The coronavirus crisis has put the squeeze on many small businesses with unprecedented speed. Here are some ways to help protect your cash flow. In such uncertain times, many small business owners are already working hard to do what they can to protect their cash flow, their businesses, their staff and themselves. Here are some […]
Finance
Understanding your level of financial commitment
As a small business owner, it’s easy to love watching the takings from a particularly good week of trade or a big sale come flooding in. As pleasant as this is, it will only ever tell half of the story unless you’re also closely watching what debts, bills and other financial commitments are coming due. […]
Leadership
6 gems of advice from leading New Zealand female entrepreneurs
If there is anything that running a small business teaches you, it’s how much there always is to learn. In that spirit, we’re marking International Women’s Day by asking six leading New Zealand female entrepreneurs to share with us the advice that has helped animate their business success. 1. Believe that you belong Poor respiratory […]