Many of the people I talk to on a daily basis complain that safety costs too much. My previous article “What is the real cost of ignoring safety?” addressed what could happen if it all goes wrong (you can read that article here) but what if you as a business owner and employer do the right thing – what are the benefits?
In this 4 part series I will cover some of the major cost benefits of investing in safety that apply to all businesses. Some are easy to define, others not so much, but they all affect the bottom line of your business in a positive way
Part 1 – Claim some serious Tax Deductions
Did you know that most safety costs are 100% tax deductible for Australian businesses? Because providing a safe workplace is a legal requirement to run a business, any cost incurred doing so is a legitimate tax deduction.
My accountant kindly provided me with the following excerpt as a reference
As per Section 8.1 of Income Tax Assessment Act 1997
“You can deduct from your assessable income any loss or outgoing to the extent that:
(a) it is incurred in gaining or producing your assessable income;
or
(b) it is necessarily incurred in carrying on a business for the purpose of gaining or producing your assessable income” Safety related costs would be considered necessarily incurred in carrying on a business for the purpose of gaining assessable income.
The reason for this is that these costs are incurred to maintain a safe work environment for employees and therefore can be considered an employment related expense. Since an employee’s contribution and cost is solely related to the production of assessable income it satisfies the tax deductibility provisions and will be tax deductible to the business.
Depending on your business and the safety provisions you have in place this could be quite a significant deduction.
Some of the items you could claim
- Emergency and OH&S manuals, policies and procedures
- Staff training in first aid, safety procedures,
- Safety & Emergency equipment
- First Aid equipment
- OH&S professional consulting
So the next time you are considering a safety related expense, remind yourself that there are tax benefits as part of the investment you are making in safety.
Read on for Part 2 – Increased productivity.
In the meantime if you would like to find out more please contact us. Sign up to our newsletter below, like us on facebook or contact us via enquiries@excitesafety.com.au
