Small Business Skills and Training Boost: 6 Best Info

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Check if you can claim a 20% bonus deduction on certain eligible training expenditure for your employees with our best guide for availing the Small Business Skills and Training Boost.

Don't miss out on this exciting news for small business proprietors! The official announcement of the Small Business Skills and Training Boost has been made early last year. This opens up the possibility for you to secure extra deductions on your 2023 or 2024 business tax return. Let's delve into this boost in a manner that's both accessible and relatable.

Here, we present our 6 best information that you need to know about the Small Business Skills and Training Boost:

1. What is Small Business Skills and Training Boost?

Small businesses boasting an aggregated annual turnover under $50 million will enjoy a bonus 20% tax deduction for external training courses provided to their employees through accredited training providers.

This enhancement is applicable to qualifying expenses incurred between 7:30 pm AEDT on March 29, 2022, and June 30, 2024

2. Who are eligible to avail Small Business Skills and Training Boost?

To access the Small Business Skills and Training Boost, your business must meet the standard aggregated annual turnover criteria, which now includes an increased threshold of $50 million.

The eligible expenditure must adhere to the following criteria:

- It should be allocated for training provided to your business's employees, whether in-person within Australia or through online courses.
- The expenses should be billed, directly or indirectly, by an external training provider registered with the appropriate authorities, and should not be associated with you or any of your affiliates.
- The expenditure should already be eligible for deduction under existing taxation laws for your business.
- It should have been incurred within a specified timeframe, which spans from 7:30 pm AEDT on March 29, 2022, to June 30, 2024.

In cases where the training constitutes a part of a broader program or course of training, the enrollment or agreement concerning the relevant expenditure must have been made or established on or after 7:30 pm (by legal time in the ACT) on March 29, 2022.

To determine your eligibility for the Small Business Technology Investment Boost, please explore the relevant information.

3. What are you entitled to deduct?

The additional deduction is applicable to expenses incurred for the provision of training to one or more of your business's employees. The training provider must meet specific registration criteria to qualify for this extra deduction.

You can verify the eligibility of training providers by visiting:

- training.gov.au
- teqsa.gov.au/national-register

Training expenses can encompass incidental costs associated with the training program, provided they are invoiced by the registered training provider. These may included expenses like the cost of books or necessary equipment for the course.

If you business is registered for GST, and the training is not exempt from GST, the bonus deduction is calculated based on the GST-exclusive amount, along with any GST that you are unable to claim as a GST credit in the course of your business operations.

For deductions that are spread over time, such as capital deductions, the bonus deduction is computed as 20% of the total eligible expenditure. You have the option to claim it upfront during the initial income year in which the bonus deduction becomes available.

It's important to note that there may be potential fringe benefits tax (FBT) implications associated with the expenses you incur. For more comprehensive information, please refer to the "Fringe Benefits Tax - A Guide for Employers."

What are you not entitled to deduct?

You are not eligible to seek reimbursement for the following expenses:

- Training expenses for non-employee business owners, including sole traders, partners in a partnership, or independent contractors.
- Costs that are tacked onto an invoice by an intermediary, such as commissions or fees, in addition to the training cost, since these charges are not directly or indirectly imposed by the registered training provider.

Research and Development Tax Benefit

If your business qualifies for a notional deduction under the Research and Development (R&D) tax incentive program, you can only avail of the notional R&D deduction and not a deduction from any other tax-related provisions. Your bonus deduction is still calculated based on what that alternative deduction would have been.

You have the option to claim both the bonus deduction and the R&D notional deduction simultaneously. Importantly, claiming the bonus deduction will not impact the value of the R&D notional deduction. The R&D notional deduction amount pertains solely to the actual expenditure incurred, without factoring in the expenditure amount associated with the bonus deduction.

Not-for-profit Organisations

A taxable not-for-profit entity can access the tax incentive by fulfilling the following conditions:

- Meeting the eligibility criteria (being a small business with an aggregated annual turnover of less than $50 million), and
- Incurring eligible expenses.

It's important to not that a taxable not-for-profit organization is not exempt from income tax. Therefore, you must file an annual tax return or officially declare that no return is required.

4. When can you claim for the Small Business Skills and Training Boost?

Typically, you seek a deduction in the same year when your expenses are accrued. However, the delayed claim rule might necessitate claiming a deduction for the eligible expense in the tax return for the income year in which you incurred it, while claiming the 20% bonus amount in a subsequent year's tax return. This timing depends on two key factors:

- The timing of your income year, which determines whether your business follows an early, normal, or late balancing schedule.
- The point within your income year when the expense was incurred.

Normal, early or late balancers

An entity's income year typically spans a 12-month period concluding on June 30, and these entities are referred to as "normal balancers." For instance, their income year runs from July 1, 2022, to June 30, 2023.

However, when an entity is granted the option to adopt a Substituted Accounting Period (SAP):

- If the last day of its income year falls between July 1 and November 30, the SAP replaces the income year ending on the preceding June 30, categorizing it as a "late balancer."
- Conversely, if the last day of its income year falls between December 1 and May 31, the adopted period replaces the income year ending on the subsequent June 30, making it an "early balancer."

It's important to note that these specific rules exclusively pertain to the claiming of the bonus deduction and do not impact the established general deduction regulations outlined in taxation law.

Normal balancers

For most businesses that adhere to the normal balancing schedule, here's how you claim deductions for eligible expenditure incurred within specific timeframes:

- Eligible expenses incurred between 7:30 pm AEDT on March 29, 2022, and June 30, 2022:
-- Claim the full 100% deduction for this period in your 2021–22 tax return.
-- Claim the 20% bonus related to this period in your 2022–23 tax return.

- Eligible expenses incurred between July 1, 2022, and June 30, 2023 (the 2022–23 income year):
-- Claim both the 100% deduction for the expenditure and the 20% bonus deduction in your 2022–23 tax return.
- Eligible expenses incurred between July 1, 2023, and June 30, 2024 (the 2023–24 income year):
-- Claim both the 100% deduction for the expenditure and the 20% bonus deduction in your 2023–24 tax return.

Example: claiming the boost deduction as a normal balancer

Let's consider the case of B Co Pty Ltd (B Co), a small business entity that follows an income year starting on July 1 and concluding on June 30 of the following year, known as a normal balancer.

On May 4, 2022, B Co disburses $1,000 (excluding GST) to facilitate employee training. The entire $1,000 is eligible for deduction according to prevailing tax laws as a business operating expense. Meeting all the criteria for the bonus deduction, B Co calculates the bonus deduction as 20% of $1,000, which equals $200.

- The training cost of $1,000 should be claimed as a general deduction in B Co's 2022 tax return because it corresponds to the year when the expense was incurred.
- As the training costs were incurred between 7:30 pm (by legal time in the ACT) on March 29, 2022, and the conclusion of B Co's 2022–23 income year, the bonus deduction of $200 should be claimed in B Co's 2022–23 tax return, due to the delayed claiming rules.


A year later, on May 4, 2023, B Co allocates $3,000 (including GST) for the training of three new employees. The entire $3,000 qualifies as a deductible business operating expense. Assuming B Co satisfies the other boost eligibility criteria, the bonus deduction amounts to 20% of $3,000, which equals $600.

- The training cost of $3,000 will be claimed as a general deduction in B Co's 2022–23 tax return since it corresponds to the year when the expenditure was incurred. The bonus deduction of $600 should also be claimed in B Co's 2022–23 tax return.


Consequently, B Co will claim:

- $1,000 in its 2021–22 tax return.
- $3,800 in its 2022–23 tax return, consisting of the general deduction for the training cost incurred on May 4, 2023 ($3,000), as well as the bonus deductions for expenses incurred on May 4, 2022 ($200) and May 4, 2023 ($600).

Late Balancers

For businesses following a late balancing schedule who accrue expenses between 7:30 pm AEDT on March 29, 2022, and the conclusion of their 2021–22 income year, the claiming process is as follows:

- You record the entire 100% deduction for this period in your 2021–22 tax return.
- You claim the additional 20% bonus deduction accrued during this period in your 2022–23 tax return.

Regarding eligible expenses incurred within your 2022–23 income year:

- You can claim both the full 100% deduction for these expenses and the 20% bonus deduction in your 2022–23 tax return.

For eligible expenses accrued between the commencement of your 2023–24 income year and June 30, 2024:

- You are entitled to claim both the complete 100% deduction for these expenses and the 20% bonus deduction in your 2023–24 tax return.

Example: claiming the boost deduction as a late balancer

Green Gracey Pty Ltd (Green Gracey) is a small business entity running a café that serves food and beverages. Green Gracey's fiscal year starts on August 1 and concludes on July 31 of the following calendar year.

On May 4, 2022, Green Gracey disburses $1,000 (excluding GST) to enable its employees to undertake safe food handling training. The entire $1,000 qualifies as a deductible business operating expense. Assuming Green Gracey meets the other criteria for the bonus deduction, the bonus deduction amounts to 20% of $1,000, which equals $200.

- The training cost of $1,000 should be claimed as a general deduction in Green Gracey's 2021–22 tax return since this corresponds to the year in which the expenditure was incurred.
- Since the training expenses were incurred between March 29, 2022, and the end of Green Gracey's 2021–22 income year (ending on July 31, 2022), under the applicable special rules for initial bonus deductions, the bonus deduction of $200 should be claimed in Green Gracey's 2022–23 tax return. This entails a delayed claim, where the bonus deduction is requested in the year following the year of expenditure.


One year later, on May 4, 2023, Green Gracey allocates $300 (excluding GST) for three new employees to undergo the same safe food handling training. The entire $300 qualifies as a deductible business operating expense. The bonus deduction is calculated as 20% of $300, which equals $60.

- The training cost of $300 should be claimed as a general deduction in Green Gracey's 2022–23 tax return, aligning with the year of expenditure.
- Given that the training costs were incurred in Green Gracey's 2022–23 income year (ending on July 31, 2023), under the pertinent special rules for initial bonus deductions, the bonus deduction of $60 should also be claimed in Green Gracey's 2022–23 tax return. This aligns with the general rule that deductions are claimed in the year of expenditure.


On May 4, 2024, Green Gracey disburses $600 (excluding GST) for three junior employees to undergo barista training. The entire $600 qualifies as a deductible business operating expense. Assuming Green Gracey satisfies the other criteria for the bonus deduction, the bonus deduction is calculated as 20% of $600, which equals $120.

- The training cost of $600 should be claimed as a general deduction in Green Gracey's 2023–24 tax return, corresponding to the year in which the expenditure was incurred.
- Expenses incurred in the 2023–24 income year fall under the later bonus deduction provision. As these costs were incurred in Green Gracey's 2023–24 income year and before June 30, 2024, the bonus deduction should be claimed in Green Gracey's 2023–24 tax return in accordance with the later bonus deduction provision. This adheres to the general rule of claiming deductions in the year of expenditure.


In summary, Green Gracey will claim the following amounts:

- $1,000 in its 2021–22 tax return (the general deduction for the training cost incurred on May 4, 2022).
- $560 in its 2022–23 tax return, consisting of the general deduction for the training cost incurred on May 4, 2023 ($300), as well as the bonus deductions for expenditures incurred on May 4, 2022 ($200) and May 4, 2023 ($60).
- $720 in its 2023–24 tax return, comprising the general deduction ($600) and the bonus deduction for the expenditure incurred on May 4, 2024 ($120).

Early Balancers

For businesses operating as early balancers that have incurred eligible expenses between 7:30 pm AEDT on March 29, 2022, and the conclusion of their 2021–22 income year, the claiming process is as follows:

- You report the entire 100% deduction for this period in your 2021–22 tax return.
- The 20% bonus incurred during this period should be claimed in your 2023–24 tax return.

Concerning eligible expenses incurred in the subsequent income years:

- Expenses incurred in your 2022–23 income year are eligible for the 100% deduction in your 2022–23 tax return, while the 20% bonus deduction should be claimed in your 2023–24 tax return.
- Expenses incurred in your 2023–24 income year qualify for both the 100% deduction and the 20% bonus deduction in your 2023–24 tax return.
- For expenses incurred in your 2024–25 income year (up until June 30, 2024), you can claim both the 100% deduction and the 20% bonus deduction in your 2024–25 tax return.

Example: claiming the boost deduction as an early balancer

Cockablue Pets follows a fiscal year that commences on January 1 and concludes on December 31 of the same calendar year, classifying them as early balancers. Their 2022–23 income year begins on January 1, 2022.

On July 28, 2022, Cockablue Pets invests $14,000 (exclusive of GST) to facilitate specialized pet grooming training for two employees. The entire $14,000 is considered a deductible business operating expense. Assuming they meet the other eligibility criteria for the bonus deduction, the bonus deduction amounts to 20% of $14,000, equating to $2,800.

- The training cost of $14,000 should be claimed as a general deduction in Cockablue Pets’ 2022–23 tax return, corresponding to the income year in which the expenditure was incurred.
- Since the expenses were incurred between March 29, 2022, and the conclusion of Cockablue Pets’ 2022–23 income year (ending on December 31, 2022), the bonus deduction of $2,800 should be claimed in Cockablue Pets’ 2023–24 tax return, in adherence to the special rule for early balancers. This involves a delayed claim, with the bonus deduction sought in the year following the year of expenditure.


In response to high demand for pet grooming services, Cockablue Pets hires three new employees in March 2023, who possess experience in animal care but lack qualifications in pet grooming. On April 10, 2023, they allocate $21,000 (exclusive of GST) for these new employees to undergo specialized pet grooming training. The entire $21,000 qualifies as a deductible business operating expense. Assuming they meet the other eligibility criteria for the bonus deduction, the bonus deduction amounts to 20% of $21,000, equating to $4,200.

- The training cost of $21,000 should be claimed as a general deduction in Cockablue Pets’ 2023–24 tax return, aligning with the income year in which the expenditure was incurred.
- The bonus deduction of $4,200 should also be claimed in their 2023–24 tax return. Since the expenses were incurred in Cockablue Pets’ 2023–24 income year (ending on December 31, 2023), the bonus deduction should be requested in Cockablue Pets’ 2023–24 tax return, following the special rule for early balancers.


Cockablue Pets expands its services by opening a combined veterinary clinic and dog grooming location in March 2024, leading to the hiring of two new junior employees with limited professional animal care experience but a strong desire to pursue a long-term career in the industry. On April 8, 2024, Cockablue Pets allocates $6,000 (exclusive of GST) for these new employees at the new clinic to undergo training in animal care. The entire $6,000 qualifies as a deductible business operating expense. Assuming they meet the other eligibility criteria for the bonus deduction, the bonus deduction amounts to 20% of $6,000, equating to $1,200.

- The training cost of $6,000 should be claimed as a general deduction in Cockablue Pets’ 2024–25 tax return, corresponding to the income year in which the expenditure was incurred.
- Expenses incurred in the 2024–25 income year fall under the later bonus deduction provision. Since these costs were incurred in Cockablue Pets’ 2024–25 income year and prior to June 30, 2024, the bonus deduction of $1,200 should be claimed in Cockablue Pets’ 2024–25 tax return, in accordance with the later bonus deduction provision, aligning with the general rule of claiming deductions in the year of expenditure.


Consequently, Cockablue Pets will claim the following amounts:

- $14,000 in its 2022–23 tax return (the general deduction for the training cost incurred on July 28, 2022).
- $28,000 in its 2023–24 tax return, comprising the general deduction for the training cost incurred on April 10, 2023 ($21,000), along with the bonus deductions for expenses incurred on July 28, 2022 ($2,800) and April 10, 2023 ($4,200).
- $7,200 in its 2024–25 tax return, consisting of the general deduction and the bonus deduction for the expenditure incurred on April 8, 2024 ($6,000 and $1,200, respectively).

5. Examples for Calculating the Value

The following examples will assist you in determining the value of the boost as either a bonus deduction or reimbursement

Example: calculating the boost for external training

Cockablue Pets Pty Ltd, a small business entity operating a veterinary center, brings a new employee on board to assist with various tasks throughout the center. This employee, possessing prior experience in animal studies, aspires to advance their skills to become a veterinary nurse.

- The business invests $3,500 (excluding GST) in external training for the employee. The bonus deduction is computed as 20% of 100% of the amount eligible for deduction under another provision of the taxation law. In this instance, the complete $3,500 is deductible as a business operating expense. Assuming all other criteria for the bonus deduction are met, the bonus deduction equals 20% of $3,500, which amounts to $700.

- Additionally, the business disburses $4,400 (inclusive of GST) for two employees to attend an external training session. Cockablue Pets is GST-registered and can claim $400 as a GST credit on their BAS. The eligible expenditure for the small business skills and training boost is the expenditure amount minus the GST amount claimed as an input tax credit, resulting in $4,000. The bonus deduction is calculated as 20% of $4,000, totaling $800.

Example: calculating the boost for employee and owner

Fix-A-Pipe, a small business specializing in plumbing services, invests $2,000 (excluding GST) in training courses for both the owner, Terry, and one of its employees. Terry's training course costs $800, while the employee's training course amounts to $1,200.

- The bonus deduction is accessible to eligible small businesses that incur training expenses for their employees. However, as Terry is the owner of the business and not considered an employee, the business needs to proportionally allocate the training costs for the bonus deduction calculation. Consequently, the bonus is determined as 20% of $1,200, resulting in a bonus deduction of $240.

- During the employee's training course, Fix-A-Pipe is billed by the training provider for books, materials, and certain practice equipment utilized in the course, totaling $88 (inclusive of GST). These incidental costs are also deemed eligible expenditure for the bonus deduction, given that they are directly invoiced by the training provider.
-- Fix-A-Pipe is registered for GST and can claim 1/11 of $88, which equals $8, as a GST input tax credit. Therefore, they will calculate the bonus as 20% of $80, resulting in a bonus deduction of $16.

Example: calculating the boost for a university course

D Co Pty Ltd, an accounting firm, has been making direct payments to a university since February 2021 to support an employee in completing an accounting course. The employee's enrollment in specific subjects occurred on two occasions: first, on February 1, 2022, and second, on July 15, 2022. Enrollments into courses or classes that fall within the period from March 29, 2022, to June 30, 2024, are eligible for the bonus deduction, provided that all other criteria are met, including the condition that the small business incurs the expenditure within the same period. The broader degree enrollment that took place before March 29, 2022, does not preclude the eligibility for the bonus deduction.

Therefore, the expenditure incurred in connection with the employee's enrollment on July 15, 2022, qualifies for the bonus deduction, while the enrollment on February 1, 2022, does not meet the criteria for eligibility.

Example: reimbursement payment to employee

Bill is an employee of an IT company, and his employer actively encourages staff to pursue training courses of their choice, agreeing to reimburse them for the associated costs. In January 2022, Bill enrolls in term 1 of a TAFE Advanced developer course to enhance his knowledge, incurring a cost of $500 (exclusive of GST). His employer promptly reimburses him the following month. In term 2, which commences in April 2022, Bill again pays $500 (exclusive of GST) and is once more reimbursed by his employer in the following month.

- The payment for term 1 was made before March 29, 2022, rendering it ineligible for the bonus deduction.

- Conversely, the payment for term 2 was incurred between March 29, 2022, and June 30, 2024, and was indirectly charged by the training provider through the reimbursement of tuition fees to the employee. Consequently, this expenditure qualifies for the bonus deduction, provided that all other criteria are met. The bonus deduction is calculated as 20% of $500, amounting to $100.

6. How to claim the bonus deduction?

To accurately request the 20% bonus deduction in your tax return, please refer to:

2023 Individual tax return instructions – Business and professional items
2023 Partnership tax return instructions
2023 Company tax return instructions
2023 Trust tax return instructions
2023 AMIT tax return instructions
2023 CCIV tax return instructions
2023 Self-managed superannuation fund annual return instructions

If you need more detailed information on this and how we can be of service to your business, feel free to reach us.

Acro Accounting & Financial Planning (AAFP) offers a one stop solution right from accounting, taxation, financial planning to other business advisory services. As Certified Practicing Accountants (CPA’s) and professional tax advisors, we pride ourselves on being experts with the latest developments relating to business and taxation. We as professional public practice firm, provide high quality taxation and business advice to our clients through a personalised service at competitive rates.

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