Skills and training boost

The Government is refocussing on the 120% skills training and technology costs deduction for small and medium business.

The Skills and Training boost is a 120% tax deduction for expenditure incurred on external training courses provided to employees.

To be eligible for the bonus deduction:

• The expenditure must be for training employees, either in-person in Australia, or online.
• The expenditure must be charged, directly or indirectly, by a registered training provider and be for training within the scope (if any) of the provider’s registration.
• The registered training provider must not be the small business or an associate of the small business.
• The expenditure must be deductible.
• Enrolment for the training must be on or after 7.30pm, 29 March 2022.

The training must be incurred for the purposes of directly improving how the business produces its income.

Only the amount charged by the training organisation is deductible. In some circumstances, this might include incidental costs such as manuals and books, but only if charged by the training organisation.

Which business structures are eligible?

To access the small business skills and training boost, your business needs to be a small business entity. Your aggregated annual turnover must be less than $50 million for the income year in which you incur the expenditure.

The training boost is not available to:

Sole traders, partners in a partnership, or independent contractors (who are not employees)
Associates of the business such as a relative, spouse or partner of an entity or person, a trustee of a trust that benefits an entity or person and a company that is sufficiently influenced by an entity or person.

For further information please visit the ATO website or contact us.