Small businesses (those with aggregated turnover of less than $50m) will get a bonus tax deduction on top of the allowable deduction for training their employees, either in-person in Australia, or online.

The Skills and Training Boost has been reignited, bringing a 20% bonus tax deduction for external training costs for staff. The bonus deduction is designed to assist you in training and upskilling your employees.

It is available for expenses you incur between 29 March 2022 and 30 June 2024. If you have incurred eligible staff training expenses before 30 June 2022, you will need to wait until your 2022-23 tax return to claim. For the 2022-23 and 2023-24 income years, the bonus deduction is claimed in the year the training expenditure is incurred.

To qualify for the bonus deduction, you will need to engage an external training organisation that is registered in Australia to complete the training. The additional deduction is not available for on-the-job or in-house training costs.

Also, the bonus deduction is available for your employees only. If you are a sole trader or partner in a partnership, you will be able to make a tax deduction claim under self-education in your individual return. Your associates and independent contractors are specifically excluded from the bonus deduction.

Training a new employee who requires upskilling for their new role is eligible for the bonus deduction.

This measure was originally announced by the former government in the 2022 Federal Budget. It is expected that it will pass through the parliamentary process and become law.

If you have any questions, please contact our office.

This information does not constitute financial or legal advice and is for general information purposes only. Please contact DLA Partners for specific advice relating to your particular circumstances.