Incentivising small businesses to upskill employees

Boosting employees’ skills for future business growth

The Government is continuing to deliver for small businesses by introducing the Skills and Training Boost.

Small businesses with annual turnover less than $50 million will have access to a new bonus 20 per cent deduction for the cost of external training courses delivered to their employees by providers registered in Australia.

Australia’s small businesses employ around 7.8 million workers. The boost will encourage small businesses to invest in the skills of their employees or train new ones. More skilled employees will drive productivity gains and enhance business growth. The boost will apply to eligible expenditure incurred from Budget night until 30 June 2024, such as a cyber security course delivered by a registered training provider. This initiative will provide $550 million in tax relief for small businesses, supporting them to invest in their employees and grow their business.

Bonus deduction for employee training:

  • Upskill existing employees
  • Train new employees
  • 20 per cent tax deduction boost

Example: Andrew owns a transport company, Distribute R Us Pty Ltd, which has annual turnover of $30 million and 120 employees. To upskill their employees, in April 2022, Distribute R Us pays for a registered training provider to run supply chain training courses, costing $200,000. Distribute R Us pays for its employees to undertake specialist logistics training, costing a further $400,000, across the 2022-23 and 2023-24 income years. Under the Government’s new Skills and Training Boost, Distribute R Us can claim a bonus deduction of $120,000, reducing its tax bill by $30,000. This is extra money that Distribute R Us can use to reinvest and grow the business.