Employer guide for reportable employer super contributions

Contributions you make under an individual employment contract

If you have employees on individual employment contracts, they will generally be considered to have the capacity to influence the amounts contributed for them that are greater than the minimum required to meet your superannuation obligations. For example, contributions that are greater than the minimum amount required under the superannuation guarantee law or a fund's trust deed will be reportable employee superannuation contributions, unless you can show that either:

the extra contributions are made for administrative simplicity, or
a documented policy is in place that does not allow an employee to influence the contributions you make on their behalf.

For more information, see Making extra contributions where you can show your employee had no influence.

Example 1

Adnan is an employee of Johnson Pty Ltd. While negotiating his individual common law employment contract, Johnson Pty Ltd agrees to pay super contributions for Adnan at the rate of 12% of his salary.

Johnson Pty Ltd has no policy regarding the employer contributions it pays for its employees. It allows employees to negotiate any rate of employer contribution they wish in excess of 9% of their ordinary time earnings in exchange for a reduced salary. Adnan and the other employees of Johnson Pty have contributions made on their behalf at varying rates.

Johnson Pty Ltd must record the extra contributions made for Adnan as reportable employer superannuation contributions. Adnan's ordinary time earnings are the same as his salary. The amount recorded is 3% of Adnan's salary - this is the amount that is additional to the minimum contributions Johnson Pty Ltd must make under the superannuation guarantee law.

Example 2

Charlotte has a common law employment contract with her employer. The contract governs the terms and conditions of only Charlotte's employment, and was settled following negotiations between her and her employer. During negotiations, Charlotte influenced the contents of the contract. Under the contract, if she elects to make 5% personal super contributions this would be matched with a 2% contribution from her employer (in addition to the amount her employer already contributes for Charlotte to comply with the Superannuation Guarantee (Administration) Act 1992).

Charlotte decides to make a 5% post-tax contribution to superannuation. This personal contribution is not a reportable employer superannuation contribution because it is part of Charlotte's assessable income. However, the additional 2% employer super contribution is a reportable employer superannuation contribution because Charlotte had the capacity to influence the terms of the contract requiring her employer to make the additional employer contributions.

Sections within What are reportable employer superannuation contributions?

Last Modified: Monday, 5 December 2011