Tax and government incentives for hiring apprentices

The government has a raft of tax and other incentives for business families who are hiring apprentices.  And for Perth and Western Australia – an economy driven by mining and food – this is especially important.

The starting point when looking at the incentives is to contact Australian Apprenticeships to see if your business is eligible. As a government agency ASA is ideally suited to helping business families understand what they can and cannot enjoy.

We have also summarized the incentives available:

Apprenticeship boost

From 5 October 2020 to 30 September 2021 businesses will enjoy a 50% subsidy (up to $7k a quarter) for every new apprentice or trainee.  This applies regardless of location, occupation, industry or size.

Businesses can apply from 5 October 2020 to 31 March 2022.  And there is an unlimited of places now available.  The apprentice or trainee needs to be undertaking a Certificate II or higher qualification and be engaged in a formally approved training contract.

Payroll tax

Western Australian businesses that employ apprentices will enjoy a payroll tax exemption for the wages paid to the apprentice.  This is a saving of up to 6.5% of the wages paid to an apprentice working in Perth or regional Western Australia.

Commencement incentive

The commencement incentive results in a payment of $1,250 for an Australian apprenticeship leading to a Certificate II qualification.  The higher rate of $1,500 is paid for an apprenticeship that leads to a Certificate III, Certificate IV, Diploma or Advanced Diploma qualification.

Adult apprentices

The Support for Older Australians is a payment of $4,000.  It is aimed at encouraging “older” apprentices (over 21).  The apprentice needs to be on the skills shortage list.

Rural incentive

The rural and regional incentive is a payment of $1,000 for employers in a rural/regional area who take on apprentices.

Construction training fund

Businesses can access grants and subsidies for apprentices working in the West Australian construction industry.  The grant can be up to $25k for apprentices working in Perth and beyond onsite in the construction, installation and fabrication industry.

Re-engagement incentive

This is a payment of $6,000 for employers taking on unemployed apprentices ($3k a trainee) who lost there job after 1 March 2020 and are employed before 30 June 2021.

Disabled apprentices

If your family business takes on an apprentice with a disability you can potentially enjoy a payment of up to $5,400 a year.

Other specialist programs

There are other specialist sector-specific apprenticeship incentive programs that must be considered like the Become a Bricklayer Brickstart Scheme, indigenous Australians, or Defence Industry Incentive for Employers.

The engagement of an apprentice can bring a significant benefit to a family in business.  And the primary driver of your decision must be to bring about a benefit to the business and the family it owns.  And a clear understanding of the government incentives can make the financial risk of employing apprentices lower – so taking advantage of the financial and tax incentives can generate great long-term outcomes – for the worker, your employees, your business, your family and yourself.

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