What's the Skills and Training Boost Tax Deduction?

November 24, 2023

Professional development is integral to most, if not all, workplaces and many of our clients have programs in place that mean team members can access additional training courses throughout the year. It means upskilling the workforce which can only mean good things for the economy! The ATO is rewarding such leadership with a new Skills and Training Boost. Read on to learn what it is, and if you’re eligible.

What is the Skills and Training Boost? 

It’s an additional 20% tax deduction for small businesses who pay for employees to complete external training courses, delivered by registered training providers. This boost applies to eligible expenditure incurred between 7:30pm AEDT (by legal time in the ACT) 29 March 2022 to 30 June 2024. 

Who’s eligible for the tax deduction?

  • Businesses with an aggregated annual turnover of less than $50 million
  • Expenditure incurred between 7:30pm AEDT 29 March 2022 to 30 June 2024
  • Expenditure must already be tax deductible 
  • External training courses delivered to employees and charged (either directly or indirectly) by registered training providers.
  • Enrolment or arrangement relating to the relevant expenditure must be made or entered into during the specified time period, including where the training is a component of a larger program or course of training. 

Exclusions for the Skills and Training Boost:

  • Sole traders, partners in a partnership or independent contractors
  • Non-training costs added onto an invoice by an intermediary on top of the cost of training. E.g commissions or fees, as they are not charged by the registered training provider
  • Training provided by an organisation that is not a “Registered Training Organisation” (RTO)

Expenditure examples:

  • Training course fees
  • Books or equipment as charged by the registered training provider

For example… 

On 10 July 2022, ABC Pty Ltd paid $2,000 + GST for employee John to undertake a training course. ABC Pty Ltd is entitled to a tax deduction of $2,000 plus an additional 20% ($400) – bringing the total deductible amount to $2,400. 

Additional information about the Skills and Training Boost

  • The expenditure must be charged by a registered external training provider that is not you or an associate of yours. The key point here is that it must be a recognised training organisation – check training.gov.au and teqsa.gov.au/national-register for a list of RTOs. 
  • How to claim:
  • For expenditure incurred between 29 March 2022 to 30 June 2022:
  • Expenditure claimed as usual in the 2022 tax return
  • Claim the additional 20% bonus deduction for this period in the 2023 tax return.
  • For expenditure incurred in the 2023 & 2024 financial years:
  • Claim the entire 120% in the respective tax return

As always, we’re here to help with any tax related questions you may have. Please get in touch if you require any further help.

Written by 
Danielle Watson
November 24, 2023

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