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Small businesses with an aggregated turnover of less than $50 million will be able to claim a bonus deduction equal to 20% of eligible expenditure incurred on external training provided to their employees.
Unlike the technology boost bonus deduction that was enacted at the same time, the training boost bonus deduction does not have an annual expenditure cap of $100,000.
The bonus deduction is available for eligible expenditure incurred between 7:30pm AEDT on 29 March 2022 and 30 June 2024.
The amount of the bonus deduction is calculated as 20% of the total of the GST exclusive amount of eligible expenditure.
Where the expenditure is eligible for both the Research and Development Tax Incentive and the bonus deduction, the taxpayer may claim both the bonus deduction and the tax offset. The bonus deduction will not affect the amount of the R&D tax offset.
Requirements
The eligible expenditure for the bonus deduction must meet the following criteria:
Registration requirements for training providers
In order for training to be eligible for the bonus deduction, the training provider must be registered at the time the expenditure is incurred with at least one of the following four government authorities:
In order for training to be eligible for the bonus deduction, if the training provider is a registered Vocational Education and Training provider under one or more of the below three Acts:
The training provided must be within the scope of the registered training provider’s registration for that kind of registered body.
Small businesses can check whether training is within the scope of a registered provider’s registration via the website www.training.gov.au.
A different regulatory framework applies to registered higher education providers within the meaning of the Tertiary Education Quality and Standards Agency Act 2011. Higher education training providers under this Act are not subject to a registration requirement that they deliver training within the scope of their registration. Therefore, the scope of registration requirement is not relevant for higher education training for the purpose of the bonus deduction.
The Tertiary Education Quality and Standards Agency maintains a national register of higher education providers on its website https://www.teqsa.gov.au/national-register
Claiming the bonus deduction
Business will claim the bonus deduction for expenditure incurred in their 2021-22 income year in their 2022-23 return. This is to allow additional time for administrative and legislative arrangements to be put in place before the bonus deduction may be claimed. The bonus deduction for expenditure incurred in an entity’s 2022-23 income year will also be claimed in its 2022-23 return. The bonus deduction for expenditure incurred in an entity’s 2023-24 income year will be claimed in its 2023-24 return.
Accounting for your Eligible Training Costs
When completing your accounts for the 2023 - 2024 income it would be beneficial to separate all training expenses that are eligible for the bonus deduction into a different account than your non-eligible training costs. This will decrease the processing time require to complete your end of year accounts and income tax returns. Which is beneficial to both you and you accountant.
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