What is a wage subsidy?
Wage subsidies are payments from the Australian Government designed to encourage companies to employ eligible candidates. They not only give employers greater flexibility in their hiring options, but businesses can also use these payments to offset the costs of on-the-job training and mentoring, or to make their workplace more accessible to employees with disabilities. As a result, it’s easier for companies to expand and grow their business, which ultimately helps boost the economy and creates more jobs.
Through the Government-funded Workforce Australia and Disability Employment Services programs, wage subsidies are available to businesses that hire eligible candidates such as long-term unemployed, young entry-level, mature-age or Indigenous jobseekers.
The maximum amount offered by the Australian Government for all wage subsidies paid through employment services providers is $10,000 (inclusive of GST).
What job types qualify for wage subsidies?
Wage subsidies can cover full-time, part-time or even casual employment, as well as apprenticeships or traineeships, providing the employee averages at least 20 hours per week over the 26-week wage subsidy period.
Not all jobs qualify for wage subsidies, so make sure you know what positions might be eligible by checking with Workforce Australia or Disability Employment Services.
Jobs that qualify for wage subsidies
These are generally:
- permanent full-time positions
- permanent part-time positions
- apprenticeships and traineeships
- jobs that comply with Australian employment standards.
Jobs that don’t qualify for wage subsidies
These are generally:
- roles where immediate family members are hired
- roles employing workers who are receiving another Australian Government wage subsidy
- jobs that displace existing employees
- commission-based, subcontracting or self-employed positions.
What types of wage subsidy are there?
Different types of wage subsidy are available depending on the category the employee falls into in each case. Payments are generally available over a period of six months, and the total amounts include GST.
Restart Wage Subsidy
For mature employees aged 50 years or over:
- up to $10,000 through Restart
- $6,500 is available for full-time employment, with a bonus payment of up to $3,500 for employment that lasts 12 months.
Indigenous Wage Subsidy
For employees from an Indigenous Australian or Torres Strait Islander background:
- up to $10,000.
Youth Bonus Wage Subsidy
For employees aged 15-24 years:
- up to $10,000.
Long Term Unemployed Subsidy
For long-term unemployed workers registered with an employment services provider for 12 months or more:
- up to $6,500.
Disability Employment Services (DES) Wage Subsidy Schemes
Funding for employers who hire jobseekers registered with Disability Employment Services to help people with a disability gain skills and experience through employment:
- Inclusive Employment Australia (IEA) Wage Subsidy: Up to $10,000 for hiring a job seeker with a disability, requiring at least 8 hours/week for 26 weeks
- Wage Subsidy Scheme (WSS): Up to $1,650 (GST incl) for short-term jobs (8+ hrs/week for 13+ weeks)
- Wage Start: Up to $6,000 for longer placements (15+ hrs/week for 26 weeks).
Australian Apprentice Wage Subsidy Schemes
- Priority Wage Subsidy (PWS): For apprentices in priority occupations: up to 10% of wages in Years 1 & 2 (max $1,500/qtr) and 5% in Year 3 (max $750/qtr)
- Disability Apprentice Wage Support (DAAWS): Up to $216.07/week for employers hiring apprentices with a disability
- Key Apprenticeship Program (KAP): Up to $10k (full-time) for clean energy/housing apprentices
- Jobs & Skills WA Employer Incentive: Up to $8,500 for eligible WA employers, paid in instalments.
No matter what type of candidate you are looking for, read our guide on How to Find Good Employees for recruitment tips that’ll apply across the board.
How are wage subsidies paid?
Eligible businesses generally receive wage subsidy payments from employment services providers over a six-month period. Employers can choose how frequently they would like the subsidy payments to be made, e.g. weekly or fortnightly – whatever works best for your organisation.
Wage subsidies are paid to eligible employers only after the Government receives verification of employment and wage payments to the employee. This is why it’s important that you, as the employer, keep appropriate records to support your wage subsidy arrangements.
Are wage subsidies taxable?
In Australia, any business income from subsidies is considered assessable income and is, therefore, taxable.
How can a wage subsidy help my business?
Receiving a wage subsidy for eligible employees can help lower your hiring costs, give you access to a bigger pool of available talent and ultimately grow your company with less risk, as your financial investment is reduced.
What’s more, a more diverse workforce can only benefit your business, since you’ll be able to draw on a wider range of perspectives and experiences those staff members bring to the table. First-hand input from mature-aged, Indigenous, young or disabled staff can have a positive impact on any business.
Who is eligible for a wage subsidy?
Wage subsidies for employers can help businesses expand and employ new staff. Specific criteria generally apply for both the applying business and the person they are hiring.
Employee requirements
Wage subsidies are available to businesses hiring an employee who is either:
- 15 to 29 years old
- an Indigenous Australian
- 50 years or older
- supported by Disability Employment Services
- a parent, or
- registered with an employment services provider for 12 months or more.
Employer requirements
Employer eligibility often includes criteria such as:
- having an Australian Business Number (ABN)
- not having previously employed the person being hired
- not being an Australian, state or territory government agency
- confirming the person being hired meets the program’s eligibility requirements
- offering an ongoing role averaging at least 20 hours per week over the six-month wage subsidy period
- confirming the work complies with employment standards for the position (for example, that it is suitable work and pays at least the national minimum wage).
Employers are generally responsible for paying wages and other contributions in line with applicable state and Commonwealth requirements (for example, superannuation, tax and insurance).
Remember that not all jobs are eligible for a wage subsidy. It is up to the individual service provider to determine whether a wage subsidy is appropriate and to decide on the level of the wage subsidy, depending on both the employer’s and the jobseeker’s needs in each case.
How can employers apply for a wage subsidy?
As a first step, contact an employment services provider to establish whether your organisation is eligible for support.
Related: How to hire your first employee
So, if you want to save money on recruiting additional staff, look into your wage subsidy options and consider hiring diverse talent, not only to take advantage of these funding options, but also to give someone from a non-traditional background the chance to gain experience, increase their knowledge and tap into more opportunities in the labour market.
Now that you’re familiar with the wage subsidies available to your business, browse our Hiring Resources for Employers to get you started on your recruitment journey.
