(SBS) Standard Business Sponsorship – Actively & Lawfully Operating In Australia

Businesses wishing to apply for an SBS must satisfy the following requirements:

1. Legally established in Australia

One of the following business registration details must be submitted either

  1. Australian Business Number (ABN)
  2. Australian Company Number (ACN) or
  3. Australian Registered Body Number (ARBN) or Australian Stock Exchange (ASX) Code.

2. Actively operating in Australia.

Examples of documents demonstrating that the business operates actively in Australia must be submitted.

  • Business Activity Statement (BAS)
  • Business bank statements
  • Lease for the Business’ premises
  • Contract of sale for the purchase of the business
  • Evidence of employment of staff such as contracts, payslips etc.
  • Letter from the business’ accountant confirming active operations
  • Evidence of costs incurred by the business such as receipts and invoices
  • Payment evidence by clients to the business for goods or services delivered such as receipts and invoices

Standard Business Sponsorship’s Training Benchmark

The “training benchmark” is one of the requirements a sponsor must satisfy for Standard Business Sponsorship application.

If the business has been trading in Australia for 12 months or more, in order to satisfy the “Training Benchmark”, one of the following pathways must be satisfied:

  1. Pathway 1 – Demonstrate that in the last 12 months prior to the lodgment of the SBS application, the business has allocated payments to an industry training fund and the payments must equal at least 2% of the payroll of the business. The business must be operating in the same industry as the industry training fund. In addition, the business must make a commitment that it will maintain such payments (equaling 2% of total payroll) in each fiscal year for the duration of SBS approval; or
  2. Pathway 2 – Demonstrate that in the last 12 months prior to the lodgment of the SBS application, expenditure on the training of Australian citizen or permanent resident employees of the business equates to at least 1% of the payroll of the business. The twelve-month period does not need to be the immediate 12 months, nor must it begin and end on a fiscal year. The business must also make a commitment that it will maintain such expenditure (i.e. 1% of total payroll) on training in each fiscal year for the term of the SBS approval.

The business will need to provide evidence of contributing to such funds such as through receipts or a letter from the relevant fund.

Pathway 2

What types of expenditure can be counted towards the Training Benchmark?

You may only count expenditure of the business entity applying for sponsorship, expenses of related entities cannot be counted. It is important to bear in mind that the training expenditure for employees who are Australian citizens and permanent resident is the only one counted. The following are examples of training expenditure, which the business can count towards the Training Benchmark:

  • Evidence of expenditure on external training. This can include train on new equipment or business systems purchased with an invoice showing training provided as a separate line item on the invoice.
  • If the business employs an individual and a key part of their role is training the business’ Australian citizens or permanent residents.
  • Employment of apprentices, trainees or recent graduates in on-going roles. A number of these individuals need to be proportional to the size of the business. In relation to the hiring of recent graduates, only the formal training aspects of the graduate position can be included (see below for further information)
  • Funding a scholarship in a formal course of study approved under the Australian Qualifications Framework where this forms part of the business’ training strategy. If your business does fund scholarships, then a key consideration in DIAC assessing whether this formal course of study is part of the business’ training strategy is the relevance of the course of the business. Relevance is given a broad interpretation.
  • Structured internal on-the-job training. Such training needs to have clearly defined goals that are aimed at increasing the employees’ skills and experience with progression through the various stages of the training. For such internal training, the business should to evidence the following:
  1. The expected learning outcomes of the employee at each stage;
  2. How the progress of the employee is monitored and assessed;
  3. How the program provides additional and enhanced skills;
  4. The use of qualified trainers to both develop the program and set assessments; and
  5. The number of people participating and their skill/occupation.

The wages of the Australian citizens or permanent residents that the business pays while these employees are attending training (except where the staffs are apprentices, trainees or recent graduates) cannot be counted.

The actual expenditure on training has to be measurable. For example, if training is provided through the franchise head office, the applicant needs to show exactly what percentage of the franchise fee is attributed to the training. There would need to be some evidence from the franchisor confirming the actual percentage.

The same principle applies to all the training expenditure that the business is including.

Definition – Payroll Expenditure

This refers to the amount of money, which an employer pays in wages to their employees in the 12 months prior to application lodgment. Payroll expenditure includes any wages, remuneration, salary, commission, bonuses, allowances, superannuation contributions (mandatory or otherwise) or eligible termination payments that are defined as wages in the Act relating to payroll tax in the relevant State/Territory.

A business can determine whether this requirement is met by calculating its total expenditure on training of Australian citizens and permanent residents and its total expenditure on payroll for the last 12 months, and determining whether total expenditure of training equates to at least 1% of payroll.

Commitment to Continued Satisfaction of Training Benchmark

This commitment is made as part in the application form for SBS. Depending on how the business satisfies the Training Benchmark, the business will need to certify/provide evidence demonstrating one of the following:

  1. Certify that the contribution to the industry training fund will be made each fiscal year; or
  2. Demonstrate that the training provided Australian citizens or permanent residents employees is part of an ongoing organizational training strategy; or
  3. Demonstrate that the employment of apprentices, trainees or graduates is part of an ongoing organizational training program.

Training provided by a third party

If the business is including the cost of training that is provided by a third party, then the business should submit invoices and receipts which confirm the cost of the training and that the training occurred within the 12 months period..

Inclusion of on-the-job or internal training

Expenditure on on-the-job or internal training can be counted towards the Training Benchmark if this training is part of a formal, structured course with identified outcomes that contribute to the upgrading of skills of employees.

Inclusion of salaries of Apprentices & Trainees

Apprenticeships and traineeships are training expenses. If the business employs apprentices and/or trainees, 100% of these employees salaries can be counted towards satisfying the 1% of payroll Training Benchmark.

The business must show that there is a formal apprenticeship or traineeship agreement in place (known as a Training Contract) which has been lodged with the relevant State or Territory government authority. The Training Contract should be submitted as supporting evidence in the SBS application.

You can count expenditure for hiring apprentices and/or trainees which the business has paid a third party such as a recruitment agency or Group Training Organization (GTO).

Inclusion of salaries of Recent Graduates

A recent graduate is considered as someone who has completed their higher education studies within the last 24 months prior to the lodgement of an application for approval as a standard business sponsor. The role which the graduate is working in needs to be relevant or related to the subject of their recently completed qualification (although DIAC is likely to give this a broad interpretation).

A recent graduate’s salary can only be counted towards the Training Benchmark if the graduate will be participating in a formal, structured graduate program for up to two years, or is completing a professional year following their graduation. If this is satisfied, then 100% of the graduate’s salary can be counted.

If the graduate is not participating in a formal, structured graduate program or completing a professional year following their graduation, then the business can only count the expenditure on the graduate position that is part of the formal training aspects of the graduate position. While the graduate is undertaking formal training, you can count the wages that the business pays to this employee during the course of the formal training.

(SBS) Standard Business Sponsorship – Actively & Lawfully Operating In Australia

Business Operates Actively & Lawfully in Australia

Businesses wishing to apply for an SBS must satisfy the following requirements:

1. Legally established in Australia
One of the following business registration details must be submitted either
a. Australian Business Number (ABN)
b. Australian Company Number (ACN)
or
c. Australian Registered Body Number (ARBN) or Australian Stock Exchange (ASX) Code.

2. Actively operating in Australia.
Examples of documents demonstrating that the business operates actively in Australia must be submitted.

  • Business Activity Statement (BAS)
    • Business bank statements
  • Lease for the Business’ premises
  • Contract of sale for the purchase of the business
  • Evidence of employment of staff such as contracts, payslips etc.
  • Letter from the business’ accountant confirming active operations
  • Evidence of costs incurred by the business such as receipts and invoices
  • Payment evidence by clients to the business for goods or services delivered such as receipts and invoices