Reportable Employer Superannuation Contributions - PAYG Payment Summaries
Last financial year a lot of businesses incorrectly completed the reportable employer superannuation contributions section of the PAYG payment summary by including superannuation guarantee contributions (SGC).
Reportable superannuation contributions are superannuation contributions where your employee influenced the rate or amount of super you contribute for them. They are additional to the amounts you must pay under SGC or an industrial agreement.
Whether an employee has the capacity to influence the amount of contributions made is shown by considering:
- Your relationship with the employee
- The employee’s involvement in negotiations regarding super contributions
- The size of the amount contributed compared to the SGC required
- Arrangements you have in place for other employees
- Non-arm’s length dealings.
Example 1: XYZ Pty Ltd has a sole director John. John’s wife and children are the only employees of the company. An industrial agreement was negotiated internally that requires XYZ Pty Ltd to pay 15 per cent of each employee’s salary into super.
In this example the six per cent superannuation paid (above the nine per cent SGC) is a reportable employer superannuation contribution as the agreement was not negotiated at arm’s length.
Example 2: John asks his employer to salary sacrifice $15,000 per annum into superannuation, therefore the $15,000 is a reportable employer superannuation contribution.
If you are unsure about your reportable employer superannuation contributions contact your Chartered Accountant.