Salary Superannuation question?
Jun 15th 2009, 10:08 pm
#1
Lost in BE Cyberspace
Thread Starter
Joined: Apr 2004
Posts: 10,375
Salary Superannuation question?
Any payroll, or accounts boffins out there?
EG
Gross monthly Salary $10,000
Salary Sacrifice $ 5,000
Income tax is now on $5,000 BUT should the employer pay employee superannuation on the 10,000 gross or the 5,000 after the salary sacrifice
???
EG
Gross monthly Salary $10,000
Salary Sacrifice $ 5,000
Income tax is now on $5,000 BUT should the employer pay employee superannuation on the 10,000 gross or the 5,000 after the salary sacrifice
???
Jun 15th 2009, 10:18 pm
#2
Guest
Posts: n/a
Re: Salary Superannuation question?
At the moment, the employer only needs to pay on $5,000, but this may be changing from July 1st, 2009. I haven't checked to see if the legislation has passed yet. It was proposed in 2008.
ATO quote to employers:
On one hand you gain, on the other you lose.
ATO quote to employers:
Super guarantee payment is calculated on the reduced salary
The amount of super guarantee you are required to pay in relation to your employee is calculated on their earnings base. As entering into a salary sacrifice arrangement reduces your employee’s earnings base, it will reduce the amount of super guarantee that you are required to pay.
The amount of super guarantee you are required to pay in relation to your employee is calculated on their earnings base. As entering into a salary sacrifice arrangement reduces your employee’s earnings base, it will reduce the amount of super guarantee that you are required to pay.
Jun 15th 2009, 10:29 pm
#3
Lost in BE Cyberspace
Thread Starter
Joined: Apr 2004
Posts: 10,375
Re: Salary Superannuation question?
Thanks, I will give you some boffin karma
Certainly dwindles the benefits of SS then
usual story if it sounds too good to be true it is
Jun 16th 2009, 2:55 am
#4
BE Forum Addict
Joined: Mar 2009
Posts: 1,289
Re: Salary Superannuation question?
That's not entirely correct. It depends on how the salary sacrificing arrangement is worded/set up.
At present, employers are allowed to set it up so that salary sacrifice reduces the earnings base. In that case what ABCD says above is true: the E'er only has to pay super on the $5,000.
But employers are also allowed - and many do - to set it up so that the salary sacrifice does not reduce the earnings base. In that case the E'er pays super on the $10,000. OP should check how their E'er does it. S/he may be a "nice" employer
.
At present, employers are allowed to set it up so that salary sacrifice reduces the earnings base. In that case what ABCD says above is true: the E'er only has to pay super on the $5,000.
But employers are also allowed - and many do - to set it up so that the salary sacrifice does not reduce the earnings base. In that case the E'er pays super on the $10,000. OP should check how their E'er does it. S/he may be a "nice" employer
.
Jun 16th 2009, 7:08 am
#5
Guest
Posts: n/a
Re: Salary Superannuation question?
From the original question, I got the feeling the employer may not be in that bracket. Hence they may be going by the ATO rules... and they only 'need' to pay on $5,000 
Some nice employers pay 12%, 15% etc on everything.
In this climate though I would expect more employers to opt to pay only what they need to pay, especially on new contract terms etc.
Some nice employers pay 12%, 15% etc on everything.
In this climate though I would expect more employers to opt to pay only what they need to pay, especially on new contract terms etc.
