If you are an employer that hires apprentices or trainees, you may be eligible for the Jobs and Skills WA Employer Incentive launched by the Department of Training and Workforce Development.
The Jobs and Skills WA Employer Incentive provides financial assistance to businesses that hire an apprentice or other new entrance trainee who has been registered via the Department’s Apprenticeship Office on or after 1 July 2019.
The Jobs and Skills WA Employer Incentive replaces the registered trainee payroll tax exemption that was ceased at the end of the financial year.
What was the old payroll tax exemption?
On Friday 14 June 2019, the Office of State Revenue announced the payroll tax exemption for newly registered trainees would no longer be available from 1 July 2019.
The payroll tax exemption enabled a new employee that had signed up under a registered training contract and met the applicable conditions, with an annual salary of $100k or less, to be exempt from payroll tax in Western Australia for a period of up to 2 years.
What does it mean for employers?
This means employers can no longer claim the payroll tax exemption for their employees who sign up under a registered training contract on or after 1 July 2019.
For trainees registered before 1 July 2019, employers can continue to claim the payroll tax exemption for these employees.
How does the new Jobs and Skills WA Employer Incentive work?
Incentive payments are determined by the length of the apprenticeship or traineeship, i.e. nominal term.
For employees undertaking a registered apprenticeship, businesses are entitled to a payment at the commencement, mid-point and completion of the nominal term.
For employees undertaking a registered traineeship, businesses are entitled to a payment at the commencement and completion of the nominal term.
If your registered apprentices and trainees also meet one of the following criteria, then your company may also be entitled to further loading payments;
- Their apprenticeship or traineeship falls within the State priority occupation list;
- They identify as an aboriginal;
- They have a disability;
- They live in either South or North Regional Western Australia; and/or
- They are aged between 21 and 30 years of age.
For information on the nominal term of an apprenticeship or traineeship, visit the Department of Training and Workforce Development website here. For a full breakdown on the incentive payments read through the Jobs and Skills WA fact sheet here.
Who is eligible for the incentive?
You may be eligible as an employer if you meet one or more of the following;
- Employ new entrant trainees;
- Employ apprentices below the payroll tax threshold (currently at $850,000 per annum);
- Are a group training organisation;
- Are a Local Government and Government Trading Enterprise; and/or
- Are a not-for-profit organisation.
For the full information on eligibility, visit the Jobs and Skills WA website.
Is the incentive better or worse than the payroll exemption?
It is hard to say, and it will differ from case to case. However, if you can prove to the Department of Training and Workforce Development that the payroll tax exemption you would have otherwise received is more than the incentive payment, you may be able to apply for a top-up payment at the end of the apprenticeship or traineeship term.
For more information on the Jobs and Skills WA Employer Incentive visit the Jobs and Skills WA website.