2022/2023 Federal Budget Breakdown for Individuals and Businesses
The announcement of the 2022/2023 Federal Budget last month has prompted individuals and businesses to consider their circumstances and how the changes and funding proposals could impact them.
There was a particular focus in this year’s Budget on improving the cost of living, upskilling employees, and providing support to help overcome the challenges brought on by the COVID-19 pandemic.
To help you understand the changes put in place, we have provided a breakdown on what you need to know as an individual and/or business owner.
Individuals
In the 2022/2023 Federal Budget, eligible individuals may see a reduction in their tax payable as well as compensation for increasing costs of living.
Compensation for inflation
Due to the increasing cost of living, the Federal Government has cut the Fuel Excise in half for six months to alleviate the increase in petrol costs our economy currently faces. They estimate this will result in savings of up to 22.1 cents per litre.
A one-off $250 Cost of Living Payment will be available for individuals receiving certain Centrelink benefits. These payments will be made throughout April 2022 and will be available to the following individuals:
- Pensioners
- Carers
- Veterans
- Job seekers
- Eligible self-funded retirees
- Concession cardholders
Cost of living tax offset
With the 2022/2023 Federal Budget a one-off cost-of-living tax offset of $420 will be offered to low and middle-income earners.
This means that individuals with an annual income of less than $126,000 will have lower amounts payable and larger refunds when lodging their 2022 tax returns.
First home buyer’s scheme
The first home buyers scheme helps individuals who don’t have the standard 20 per cent deposit required to secure a home loan.
The 2022/2023 Federal Budget saw the cap on this scheme increase from 10,000 places to 35,000 places per year. There will also be an additional 10,000 places for individuals buying their homes in regional areas.
Tax deductible COVID-19 test
From 1 July 2021, individuals who were or are required to take a COVID-19 test to attend work will be able to claim that cost through their next tax return.
Businesses
The 2022/2023 Federal Budget saw a focus on boosting investment in skills and new technologies for small businesses.
Business skills boost
Businesses with an aggregated turnover of less than $50 million can deduct external training courses for their employees for up to 20 per cent of the expenditure incurred. This will be valid from 29 March 2022 to 30 June 2023.
Business technology boost
Businesses incurring expenses for digital technologies with an annual turnover of less than $50 million will be eligible to deduct an additional 20 per cent of expenditure up to $100,000. This will also be valid from 29 March 2022 to 30 June 2023.
Skills and training for apprentices and trainees
There will be an overhaul to the Apprenticeship Incentive Scheme aimed at increasing the number of qualified tradespeople. This will be done by:
- Subsidising the wages of eligible apprentices and trainees
- Providing payments of up to $5,000 to new apprentices and trainees
- Providing up to $15,000 for employers of new apprentices and trainees
This will be great assistance to businesses looking to grow their workforce but that are also concerned about the cost of onboarding and training.
Reduction of GDP uplift in PAYG instalments
For the 2022/2023 tax year, the GDP uplift of PAYG instalments is set at 2 per cent. This is a reduction to years past where PAYG was based on the business’s prior year’s tax, plus 10 per cent.
COVID-19 grants and support payments
From 1 July 2020 to 30 June 2022, COVID-19 grants will be classed as non-assessable income. The grants in NSW include:
- 2022 Small Business Support Program
- Commercial Landlord Hardship Grant
- Accommodation Support Grant
- Festival Relaunch Grant
Tax deductible COVID-19 test
Similarly to the individual COVID-19 tests, from 1 July 2021, businesses providing employees with COVID-19 tests to attend work will be able to deduct this cost. No fringe benefits tax will apply.
