20% energy tax deduction for small businesses: Are you eligible?

Words by Zembl

Amidst snowballing environmental concerns and a growing sense of urgency to shift towards sustainable practices, the Australian government has introduced an energy tax incentive for small businesses. This initiative is a part of the government's broader fiscal strategy to support small and medium-sized enterprises (SMEs) whilst simultaneously promoting energy efficiency and sustainability.

What is the Small Business Energy Incentive?

The Small Business Energy Incentive is a tax program that allows businesses with an annual turnover of less than $50 million to utilise a bonus 20% tax deduction for costs associated with electrification and efficient use of energy. This initiative aims to help up to 3.8 million small and medium-sized businesses save energy whilst cutting bills.

How does it work?

Under the scheme, you can receive a bonus deduction of up to $20,000.

The tax incentive provides support for small and medium businesses to make energy-efficient upgrades. These upgrades include installing solar panels, upgrading to energy-efficient appliances, retrofitting buildings to improve energy efficiency, and more. If you’re doing some of these, you may already be eligible. If you’re not, consider implementing them before next tax time rolls around.

What does it mean for you?

This incentive not only supports a steady green transition but also provides much needed financial relief to small businesses. Within the scheme, there is the potential to deduct an additional 20% of expenditure used to support businesses digital operations, meaning small businesses can invest more in their growth and innovation whilst carving costs off other areas.

Moreover, with the maximum bonus tax deduction being $20,000 per business, this could significantly lower the overall operating costs for SMEs, allowing them to significantly improve their bottom lines.

Zembl can help you save more in 2024

If your business is looking for savings and money back on your bottom line this year – or any year – Zembl is here. Simply request an obligation-free energy review below and we will do the legwork. Our Energy Experts will give you a callback and, if you are willing, switch you on the spot to a better energy deal than you’re currently on.

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