Skills and training boost

What is the boost?

Small businesses with annual turnover less than $50 million, will be entitled to a bonus 20% tax deduction on eligible expenditure incurred on training and upskilling employees. 

The boost applies to expenditure from 7.30pm 29 March 2022 until 30 June 2024. There is no cap on the bonus deduction.

For example, a training course provided to employees by an external training provider that costs $10,000 will provide a total deduction of $12,000 for the employer.

What is it aimed to do?

Encourage small businesses to upskill their employees to build a better trained workforce and address skills shortages.

Who is eligible?

• Small business entity with aggregated annual turnover less than $50 million, and
• Expenditure incurred in the period from 7.30pm on 29 March 2022 until 30 June 2024

Eligible Expenditure

• Expenditure must be external training for employees (either in person in Australia, or online)
• Other persons are not eligible for bonus deduction e.g. sole traders, partners in partnership or contractors
• Expenditure must be charged by a registered training provider and be within the scope of the provider’s registration
• It can be charged indirectly through an intermediary, however costs added onto an invoice by an intermediary are not eligible for the bonus deduction (e.g. commissions and fees)
• The training provider must be registered with at least one of the following four government authorities
• Australian Skills Quality Authority (ASQA) 
• Tertiary Education Quality and Standards Agency (TEQSA) 
• Victorian Registration and Qualifications Authority 
• Training Accreditation Council of Western Australia 
• Registered training provider must not be an associate of the small business
• Enrolment in a training course must be after 7.30pm on 29 March 2022 
• Expenditure must be ordinarily deductible under the taxation law
• Incidental costs, such as books and equipment, will be eligible provided they are charged by the registered training provider.
  

Excluded Expenditure

Cost of in-house or on-the-job training is not eligible

How do I get it?

Any expenditure incurred in the 2021–22 income year will not get the bonus deduction until you lodge your 2022–23 income tax return. Bonus deductions for expenses incurred in 2022-23 and 2023-24 income year will be included in the tax return when the expense is incurred.

Closing comment

Should you have any queries regarding this measure, please contact our office for more information.

Disclaimer

The information provided in this article does not constitute advice. The information is of a general nature only and does not take into account your individual situation. It should not be used, relied upon, or treated as a substitute for specific professional advice. We recommend that you contact Brentnalls SA before making any decision to discuss your particular requirements or circumstances.