Employee, no salary sacrifice
Amanda is an employee who in 2011-12 financial year:
- earned an annual salary of $42,000
- salary packaged a car, giving her reportable fringe benefits of $8,000
- had investments that returned an annual dividend of $6,000
- made eligible personal super contributions of $800 to her super fund - these super contributions were in addition to the super guarantee contributions her employer had to make.
Amanda must work out if she meets both the income threshold test and the 10% eligible income test if she is to receive a super co-contribution.
Her total income for the income threshold test is her assessable income plus her reportable fringe benefits:
Assessable income equals
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salary
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$42,000
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plus dividends
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+ $6,000
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= $48,000
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plus reportable fringe benefits
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+ $8,000
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Total income for the income threshold test
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= $56,000
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Amanda has met the income threshold test, as her total income of $56,000 is less than the $61,920 higher income threshold for the financial year.
Next, she works out if she meets the 10% eligible income test.
When working out if she meets this requirement, she needs to take into account that her personal investment income of $6,000 is not counted as eligible income, but it is part of her total income.
Amanda works out her total income for the 10% eligible income test as follows:
annual salary + reportable fringe benefit
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x 100
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annual salary + investment income + reportable fringe benefit
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Which is:
$42,000 + $8,000
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x 100
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$42,000 + $6,000+ $8,000
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= 89%
This percentage is greater than 10% of her total income, so Amanda meets the 10% eligible income test.
Amanda has satisfied both tests and qualifies for the super co-contribution. As her total income is between the lower and higher income thresholds, she calculates her super co-contribution using calculation 3 for 2011-12 financial year.
Amanda's maximum super co-contribution entitlement is:
$1,000 - ([Total income of $56,000 - $31,920] x 0.03333) = $197.41
This is rounded up to the nearest multiple of 5 cents, giving $197.45 (amount A).
Amanda's super co-contribution based on her eligible personal super contributions is $800 (amount B).
Amanda will receive $197.45, the lesser of amount A and amount B.
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Last Modified: Tuesday, 21 May 2013