Apprentice employer incentives in Australia: what you can claim

The short version for November 2026

The federal scheme is called the Australian Apprenticeships Incentive System. It is run by the Department of Employment and Workplace Relations (DEWR), and you access it through an Apprentice Connect Australia Provider, the organisation that signs up your apprentice and lodges the Training Contract with your state training authority.

There are three payments that go to employers: the Priority Hiring Incentive, the Key Apprenticeship Program Employer Incentive, and Disability Australian Apprentice Wage Support. You get one of these per apprenticeship, not all of them stacked. Your apprentice may also get their own payments, which can help you recruit.

• •Priority Hiring Incentive: up to $2,500 for a full-time apprentice (as at November 2026) in a Priority List occupation.
• •Key Apprenticeship Program Employer Incentive: up to $5,000 for a full-time apprentice (as at November 2026) in a Priority List occupation flagged as housing construction or clean energy.
• •Disability Australian Apprentice Wage Support: a weekly wage subsidy if your apprentice has a disability that affects their work.
• •No Priority List occupation means no federal employer incentive, whatever the trade or qualification level.
• •State payroll tax relief only matters if your total wages are above your state's payroll tax threshold. Many small trade businesses never pay payroll tax at all.

Federal employer incentives for apprenticeships starting in 2026

Both main incentives are paid in two instalments during the first year, at 6 and 12 months after the start date on the Training Contract. These figures come from the DEWR grant guidelines (updated August 2026) and apply to commencements and recommencements in 2026. Part-time rates are flat, whatever hours the apprentice works.

• •Priority Hiring Incentive, full-time: $1,000 at 6 months and $1,500 at 12 months. Part-time: $500 and $750.
• •Priority Hiring Incentive cap: for starts on or after 1 January 2026, one employer can claim a maximum of $2,500 per apprenticeship journey, no matter how many Training Contracts or returns from suspension there are in the same qualification and occupation. Starts before 1 January 2026 had a $5,000 cap.
• •Key Apprenticeship Program Employer Incentive, full-time: $2,000 at 6 months and $3,000 at 12 months. Part-time: $1,000 and $1,500. It covers two streams, Housing Construction and New Energy, and is paid per apprenticeship, not per stream.
• •You cannot claim the Priority Hiring Incentive and the Key Apprenticeship Program incentive (or wage support for a disabled apprentice) for the same apprenticeship.
• •Existing workers can qualify for both incentives, so upskilling a labourer you already employ into a priority trade may still attract a payment.

What changes from 1 January 2027

The changes were announced in the 2026-27 federal Budget and set out in a DEWR factsheet last updated 12 May 2026. The current grant guidelines run until 31 December 2026, so check for updated guidelines before relying on the 2027 details.

The key point for timing: the start date registered on the Training Contract decides which rules apply. If you start or restart an apprentice before 1 January 2027, you keep the current rates, even if you are a large employer.

• •Key Apprenticeship Program Employer Incentive: drops to up to $4,000 (down from $5,000), paid in two instalments in the first year. It is extended for eligible apprenticeships until 30 June 2029. The exact instalment split had not been published in the factsheet.
• •Priority Hiring Incentive: no change to the amount. It stays at up to $2,500, paid in two instalments in the first year.
• •Large employers: businesses with 200 or more employees will not be eligible for either incentive for new apprenticeships from 1 January 2027. Group training organisations are excepted. The factsheet does not explain how employees are counted, so ask your provider if you are close to 200.
• •Grandfathering: eligible employers (including large employers) who start or restart an apprenticeship before 1 January 2027 keep up to $5,000 for the Key Apprenticeship Program incentive and $2,500 for the Priority Hiring Incentive.
• •Priority List: the method for building the list changes from 1 January 2027 (see the next section). The 2026 list stays the same for the rest of 2026.
• •Staying the same: the apprentice's own Key Apprenticeship Program payment, the Australian Apprentice Training Support Payment, Living Away From Home Allowance, Australian Apprenticeship Support Loans, and Disability Australian Apprentice Wage Support.

The Priority List decides whether you get anything

Every federal incentive except disability wage support depends on the Australian Apprenticeships Priority List. The qualification and the occupation on the Training Contract must be a valid combination on the list, at Certificate III, Certificate IV, Diploma or Advanced Diploma level. A subset of listed occupations is flagged as housing construction or new energy, and only those attract the Key Apprenticeship Program incentive.

The list is updated on 1 January each year. Eligibility is locked in at commencement, so a later change to the list does not take away an incentive you already qualified for. That cuts both ways: if your trade comes off the list on 1 January, an apprentice who starts after that date will not attract the incentive.

From 1 January 2027 DEWR says the list will take both national and regional skills shortages into account (informed by the Jobs and Skills Australia Occupation Shortage List), look at shortage ratings over two years for stability, and target government priorities including construction, net zero, manufacturing, and care and support. Check the current list with your provider before you sign a Training Contract, not after.

Disability, mature-age and other support

Disability Australian Apprentice Wage Support is paid weekly in arrears to employers of an apprentice with a disability who can work in open employment with support. The rate in the DEWR guidelines (updated August 2026) is $226.01 per week for a full-time apprentice, pro rata for part-time, indexed each 1 July. You must pay at least that amount in wages, you cannot also claim the Priority Hiring Incentive or Key Apprenticeship Program incentive for the same apprentice, and eligibility needs an occupational assessment (Form 608) by a registered medical practitioner or psychologist. ADD and ADHD diagnoses can qualify. The apprentice's training provider can also get funding for tutoring, mentoring or interpreting.

There is no separate federal employer payment for mature-age apprentices in the current system. An adult apprentice in a Priority List occupation attracts the same incentives as anyone else. Some states add their own adult apprentice incentives: Western Australia, for example, offers an Adult Apprentice Employer Incentive (see the state section).

Your apprentice may also be eligible for their own payments, which is worth mentioning when you recruit. As at November 2026 these include the Key Apprenticeship Program apprentice incentive (up to $10,000 full-time over the apprenticeship for housing construction and new energy apprentices), the Australian Apprentice Training Support Payment (up to $2,500 over the first two years for Priority List apprentices), Living Away From Home Allowance and Australian Apprenticeship Support Loans. Their provider handles these with them.

How and when you claim

You do not apply for incentives up front. Your Apprentice Connect Australia Provider signs you and the apprentice up, the state training authority approves the Training Contract, and the provider does a preliminary eligibility check. When each payment falls due, DEWR makes a claim form available to you in the Apprenticeships Data Management System (ADMS), and you lodge it online with evidence.

If you do not know who your provider is, it is printed on the Training Contract, or you can call the Skilling Australia hotline on 1800 020 108. For finding a candidate in the first place, see How to hire an apprentice in Australia: a step by step guide for employers or browse opted-in apprentices on /match.

• •Effect date: the claim opens on the day after the 6 or 12 month claim period ends. Example: a 1 January start has a first claim period ending 30 June, so the claim opens 1 July.
• •Deadline: you have 12 calendar months from each effect date to lodge. Disability wage support claims are lodged in monthly blocks within 12 months of the start of the claim period.
• •Evidence of training: a signed Training Plan, RTO enrolment letter or similar, if not already provided.
• •Evidence of employment: a payslip, payroll printout or timesheet showing your legal name or ABN, the apprentice's name and a date range covering the claim period end date. Hide the apprentice's tax file number before you upload.
• •Returned claims: if evidence is missing, the claim comes back and you have 20 business days to resubmit.
• •Reviews: you can ask for a review of a decision through your provider, in writing, within three months.
• •Payments go to your nominated bank account and can be used as you see fit. Talk to your accountant about how they are treated for tax.

Payroll tax relief for apprentice wages, state by state

Payroll tax is a state tax, and the rules for apprentice wages are very different in each state. This only matters if your total wages exceed your state's threshold. Here is what we could verify from each revenue office as at November 2026. Rules change with state budgets, so check the revenue office before you rely on it.

• •NSW: apprentice and trainee wages are taxable, but you can claim a rebate on wages paid to approved apprentices and new entrant trainees for the period of their course. Existing worker trainees do not qualify. The rebate is calculated in your monthly and annual returns (Revenue NSW).
• •Victoria: the State Revenue Office does not list a general exemption for apprentice wages. It exempts wages for a re-employed out-of-trade apprentice or trainee who continues the same training with a new employer (started on or after 1 July 2016, and you are not grouped with the previous employer), and wages paid through approved group training organisations.
• •Queensland: wages paid to apprentices and trainees under a training contract are exempt, and you can also claim a rebate worth 50% of those wages multiplied by the payroll tax rate, which reduces tax on your other wages. The Queensland Revenue Office lists the rebate for each financial year up to 30 June 2027. It is calculated automatically when you enter apprentice wages in QRO Online.
• •Western Australia: wages paid to apprentices under a registered training contract are exempt for the life of the contract, but not while it is suspended. Trainee wages under contracts registered from 1 July 2019 are not exempt.
• •South Australia: wages for apprentices and trainees who started on or after 1 July 2022 are taxable. The earlier 12 month exemption only covered contracts that started between 10 November 2020 and 30 June 2022.
• •Tasmania: the State Revenue Office rebate scheme covers apprentices who started between 1 July 2023 and 30 June 2026, for up to two years, and you must register for the rebate. We could not confirm an extension for apprentices starting after 30 June 2026, so check with the SRO before counting on it.
• •ACT: we could not find a general payroll tax exemption or rebate for apprentice wages paid by ordinary employers on the ACT Revenue Office site. An exemption has applied to approved group training organisations. Check directly with the ACT Revenue Office.
• •Northern Territory: since 1 July 2025, wages paid to apprentices and trainees (as defined in NT training law) are exempt. You still report them in gross wages and in the exempt wages field.

Training fees and state employer incentives

Your apprentice's off-the-job training is usually subsidised by the state, and in several states it is currently fee-free. Who pays any remaining fee (you or the apprentice) depends on the award and your agreement, so check Your obligations when you employ an apprentice and the Fair Work Pay Calculator (https://calculate.fairwork.gov.au/) for pay and costs rather than guessing. State programs change often, so confirm with your state training authority and see the state guides, for example Apprenticeships in NSW: incentives, fee-free training and where to start or Apprenticeships in WA: incentives, fees and where to start.

• •NSW: the NSW Government pays the course cost for new apprenticeships funded under Smart and Skilled, with no upfront training cost for the apprentice or employer (Skills NSW page updated September 2026).
• •Queensland: Free Apprenticeships for Under 25s covers training fees for apprentices under 25 in a high priority qualification who start before 30 June 2027. Related costs such as uniforms and travel may still apply.
• •Western Australia: the Jobs and Skills WA Employer Incentive pays a base of up to $8,500 per apprentice or new entrant trainee, with loadings for some groups, but not to employers whose assessable wages exceed $1 million a year (as at the October 2026 page). The Adult Apprentice Employer Incentive pays up to $26,800 for apprentices aged 21 or older in a Priority Start occupation, and the Construction Training Fund offers grants for construction apprentices.
• •Victoria, South Australia, Tasmania, the ACT and the NT run their own subsidised training and occasional employer programs. Ask your provider which apply to your trade and region, as they are not covered here.

Pitfalls that cost employers their incentive

Most lost payments come from eligibility rules nobody checked at sign-up, or from the apprentice not being on the books on the right day.

• •Wrong occupation code: if the qualification and occupation on the Training Contract are not a valid Priority List combination, there is no incentive. Check before signing.
• •Waiting period: no payment until at least three months, or the probation period set by your state training authority, whichever is longer.
• •Cancellations and suspensions: you cannot claim if the apprentice cancels before the claim period end date or is suspended at that time. The apprentice must be employed and in training on the end date.
• •Missed deadlines: 12 months from the effect date, then the money is gone. Put both dates in your calendar on day one.
• •Change of circumstances: tell your provider within 14 days if anything changes, such as hours, suspension or leaving.
• •Excluded arrangements: casual, subcontract, piece-rate, commission-only, seasonal or private household employment does not qualify, and neither does an apprentice who is a partner, director, shareholder or has a financial interest in your business.
• •Previous qualifications: no incentive if the apprentice has completed the same qualification (or one it supersedes) in the last seven years.
• •Residency: the apprentice must be an Australian citizen, a permanent resident, or a New Zealand passport holder with at least six months' residence in Australia.
• •Group training: if the apprentice is employed by a group training organisation, the GTO claims the incentive, not you as host. If you later take the apprentice on directly, it is treated as a new commencement. See Group training (GTO) or hire directly? An employer guide.
• •The 2027 cut-off: the date on the Training Contract decides your rate. If you plan to start a housing construction apprentice around New Year, a start before 1 January 2027 keeps up to $5,000 instead of up to $4,000.
• •False information on a claim is a Commonwealth offence. Keep payroll records that match what you declare.

Before you sign: a quick checklist

Treat incentives as a bonus, not the business case. Budget for the apprentice's award wages, super, tools, supervision time and training days first, using the Fair Work Pay Calculator and the relevant award, then see what the incentives give back.

• •Ask your Apprentice Connect Australia Provider to confirm the exact qualification and occupation and whether it is on the Priority List, and whether it is flagged housing construction or new energy.
• •Confirm the start date you will put on the Training Contract and which year's rates apply.
• •Check your state payroll tax position with your accountant if you are near or over the threshold.
• •Check fee-free or subsidised training with your state training authority.
• •Set calendar reminders for the 6 and 12 month effect dates and the 12 month claim deadlines.
• •Read up on your obligations at Your obligations when you employ an apprentice and pay rates at Apprentice wages in Australia.