Employers should know the type of super contribution made on behalf of employees to determine if contributions are reportable or non-reportable.
Matched contributions
- are reportable super contributions under individual contracts. This is because the employee directly influenced the terms of the agreement
- are not reportable under collectively negotiated industrial agreements. This is the case, even though it's triggered by an employee choice.
Example: matching contribution triggered by collective agreement
Rodger's employer is required under an industrial agreement to make an additional employer contribution for Rodger's benefit.
The agreement allows Rodger to elect to contribute 0%, 5% or 8% of his salary as a personal after-tax contribution.
His employer is required to contribute 9.5%, 11.5% or 13% respectively, based on Rodger's election under the industrial agreement.
Rodger elects to contribute 8% as a personal after-tax contribution. His employer contributes 13% super as the employer contribution.
None of the amounts the employer contributes are reportable employer super contributions. This is because the additional employer contributions are required under industrial agreement.
Additionally, none of Rodger's personal after-tax super contributions are reportable employer super contributions. This is because they are already included in Rodger's assessable income.
Summary
- Under an industrial agreement, Rodger's employer makes additional employer contributions for Rodger's benefit.
- None of the amounts the employer contributes are reportable employer super contributions.
- None of Roger's personal after-tax super contributions are reportable employer super contributions.
Example: matching contributions triggered by an individual agreement
Charlotte negotiated an individual common law employment contract with her employer.
Under the contract, if she elects to make 5% personal super contributions her employer would match them with a 2% contribution. This is in addition to the amount her employer already contributes for Charlotte to comply with super guarantee obligations.
Charlotte decides to make a 5% after-tax contribution to super. This personal contribution is not a reportable employer super contribution because it's part of Charlotte's assessable income.
However, the additional 2% employer super contribution is reportable. This is because Charlotte had the capacity to influence the terms of the contract requiring her employer to make the additional contribution.
End of exampleDefined benefit fund contributions
Employer super contributions to a defined benefit fund for employees with defined benefit interests are not reportable.
This is because the amount you must contribute for defined benefit members is decided by the fund's actuary, not your employee.
Extra contributions are reportable if your employee:
- asks you to make extra contributions to their fund account from their pre-tax income
- has an accumulation account in the defined benefit fund (or any other fund).
Example: contributions to a defined benefit fund
Indira works for a large company and is a member of a defined benefit super fund. The company makes contributions to the fund according to the fund rules. These employer contributions are worked out by the fund's actuary.
Indira has no influence over, or choice about, this amount. Therefore, it is not a reportable employer super contribution.
Indira can choose to contribute up to 5% extra from her pre-tax income and decides to do so. The extra contribution goes into her account within the defined benefit fund. This extra amount is a reportable employer super contribution and must be reported on Indira's payment summary or through STP. If reported through STP, the extra amount it included on the income statement.
End of exampleAfter-tax income contributions
Super contributions made by your employee from their after-tax (net) income are not reportable employer super contributions. These are considered the employee's personal super contributions. This is the case even if you deduct the amounts from your employee's take-home pay and forward the amount to their super fund on their behalf.
Example: contributions from after-tax income
- Jo asks her employer to pay $50 a fortnight to her super fund from her after-tax pay.
- Although Jo has directly influenced the amount of super paid on her behalf, the additional $50 is not a reportable employer super contribution because it comes from Jo's after-tax income.
- The $50 payments are Jo's personal (member) contributions and are part of her assessable income.