Tailored Accounts facebook   +61 2 6169 5196

2022 Federal Budget Summary

Source: Tax & Super Australia

On Tuesday, 29 March 2022, Treasurer Josh Frydenberg handed down the 2022-23 Federal Budget. This is a summary of the measures announced by the budget:

  • Small Businesses will be provided with a 20% bonus deduction for eligible external training courses as well as in their expenditure on digital technologies
  • Fuel excise reduced by 50% for 6 months
  • Low and middle-income earners will receive a one-off $420 cost of living tax offset 
  • Pensioners and welfare recipients will receive a one-off $250 payment 

Personal Taxation:

  • LMITO increased by $420 for 2021-22: The low and middle-income tax offset (LMITO) will increase by $420 for individuals with earnings up to $126,000 per annum, payable in respect of the 2021-22 income year. The maximum offset payable to an individual is $1,500 where their earnings are between $48,001 and $90,000 which then phases out up to an amount of $126,000. An extension of this tax offset has not been announced by the Government beyond 2021-22.
  • Personal tax rates: No changes were made to the personal tax rates for 2022-23.
  • Employee share schemes: Individuals offered an employee share scheme may invest up to $30,000 in unlisted companies per year (accruable for unexercised options for up to 5 years), plus 70% of dividends and cash bonuses. Participants are able to invest any amount if it would allow them to immediately take advantage of a planned sale or listing of the company.

Business Taxation

  • Small business 20% deduction boost: skills training and digital adoption: Businesses (up to $50m turnover) will receive a 20% uplift on deductions for eligible expenditure on external training courses and digital technology. The 20% boost will apply to eligible expenditure incurred from 7:30 pm on 29 March 2022 until 30 June 2024 (for skills training) and 30 June 2023 (for digital adoption). An annual cap will be applied in each qualifying income year so that expenditures up to $100,000 will be eligible for the boost. 
  • Patent box income extended: The concessional tax treatment for eligible corporate income associated with new patents in the medical and biotechnology sectors will be extended to corporate taxpayers who commercialise their: (i) eligible patents linked to agricultural and veterinary chemical products; and (ii) patented technologies which have the potential to lower emissions. In both cases, income will be taxed at 17% in relation to rights and patents granted or issued after 29 March 2022, for income years starting on or after 1 July 2023.
  • PAYG Instalments: From 1 January 2024, companies will be allowed to choose to have their PAYG instalments calculated based on current financial performance, extracted from business accounting software (with some tax adjustments). For Small and Medium Businesses, the GDP uplift factors will be limited to 2% in respect of instalments that relate to the 2022-23 income year. The measure applies to businesses with up to $10 million annual aggregated turnover for GST instalments and $50 million annual aggregated turnover for PAYG instalments.
  • Digitalising trust income: The Government intends to allow all trust tax return filers to be given the option of lodging income tax returns electronically, increasing pre-filling and automating ATO assurance processes. If enacted, this measure will apply from 1 July 2024. 
  • Taxable payments data reporting: From 1 January 2024, businesses will be provided with the option to report Taxable Payments Reporting System data on the same lodgment cycle as their activity statements via accounting software.

Superannuation Highlights

  • Super pension drawdowns: 50% reduction extended to 2022-23: The 50% reduction of the minimum superannuation pension drawdown requirements will be extended for the 2022-23 income year.
  • Super Guarantee rate: The Budget did not contain any change to the legislated Super Guarantee rate rise from 10% to 10.5% for 2022-23.

Other Measures:

  • Fuel excise temporary reduction: the fuel excise will be reduced by 50% for 6 months, starting from midnight on Budget night.  
  • $250 cost of living payment: the Government will make a $250 one-off cost of living payment in April 2022 to eligible pensioners, welfare recipients, veterans and concession cardholders.  
  • Apprentice wage subsidy extension:the Budget confirmed the extension of the Boosting Apprenticeship Commencement (BAC) and Completing Apprenticeship Commencements (CAC) wage subsidies by 3 months to 30 June 2022. 
Subscribe to this RSS feed