Apprentices and Incentives: Tricks of the trade in sharing the cost of training

By Cutcher & Neale Accounting and Financial Services - November 19, 2021

Taking the first step in employment can be a very daunting experience, and many people looking to enter their chosen industry are often looking for an opportunity to gain some valuable experience.

In return, the employer is gifted a new member to their industry that they can shape into the employee they want or need for their business.

For the employer this can be a costly in both time and money, with no guarantee that the apprentice will stay on once they finish their time. However, as an employer you are not alone, with both State and Federal governments prepared to assist you in taking an apprentice on.

In May 2021, the Federal government extended their incentive programs with their Boosting Apprenticeship Commencements program. This allows a wage subsidy for an apprentice (or trainee) undertaking a Certificate II or higher and has a training contract that is formally approved by the state training authority. This subsidy is a maximum of $7,000 per quarter for wages paid in a 12-month period. It applies to employers of any size or industry, Australia-wide between 5 October 2020 and 31 March 2022.

A consideration prior to applying for this subsidy is that whilst you can still be eligible for other apprenticeship incentive programs, you are not eligible for any other form of Australian Government wage subsidy.

The New South Wales government also offers assistance via both incentives and reductions in liabilities, key items are listed below.

One of the most unpopular taxes that businesses face is payroll tax. The government offers a rebate to wages (including superannuation, allowances, and fringe benefits) paid to approved apprentices resulting in no payroll tax being levied on payments to your apprentice.

In New South Wales, an employer is entitled to a discount on their workers compensation policy based on the apprentice wages paid. Similar to the payroll tax concessions, an employer must have entered a valid training contract approved by Training Services NSW. It is important to check these concessions for each state in which you employ.

By signing on a registered apprentice, the Federal government has incentive payments in addition to the Boosting Apprenticeship Commencements program. Depending on the certificate level, you may be eligible to receive either $1,250 or $1,500 at the commencement of an apprenticeship and $2,500 once the apprentice completes their apprenticeship.

Your business may be eligible for further incentives depending on specific circumstances that may apply, such as rural and regional incentives, or for employing adult apprentices. It is recommended that you do this in conjunction with your apprenticeship network provider who can assist you in claiming the maximum payment you will be eligible for.

Employing an apprentice or trainee can be an outlay for your business you do not have to weigh-up alone. Working alongside your business advisor and engaging your apprenticeship network provider will ensure you have checked all boxes, registered your apprenticeships correctly and are ensuring you are receiving the rebates, incentives you are entitled to.

If you require assistance in considering whether taking on one or more apprentices is the correct fit for your business model, contact a C&N Advisor.

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