My business entity has had to borrow money from the bank to be able to pay employees before getting the JobKeeper payment. Can I deduct the interest on that loan?

April 27, 2020

Yes (subject to the normal rules of deductibility). 

The deductibility of interest on a loan obtained to satisfy the requirement that eligible employees be paid $1,500 per fortnight before the employer receives the JobKeeper payment, is governed by the ordinary rules applying to business expenses.  

Interest on borrowed moneys used to pay current business expenses, such as salary and wages, is generally deductible – hence why JobKeeper payments to employees will generally be deductible to the employer.  So it follows that most businesses will be able to deduct interest on a loan taken out to fund those payments.