Reporting and record keeping
Voluntary employer contributions such as salary-sacrificed amounts must be reported on your employee's annual payment summary at the label 'Reportable employer superannuation contributions'.
We need this information because even though the contributions are not included in your employee's assessable income, they are included in the income tests for some benefits and obligations, such as:
- deductions for personal super contributions and non-commercial losses
- super co-contribution
- Medicare levy surcharge
- a range of Centrelink and child support benefits and obligations.
Reportable employer super contributions do not include compulsory super guarantee amounts or contributions required to be made by an industrial award or determination, or notional agreements that preserve state awards. You only report the sacrificed amount in excess of these mandated contributions.
Salary-sacrificed super contributions to a complying super fund are not fringe benefits and are not included on your employee's payment summary as reportable fringe benefit amounts.
Zoe starts work on 1 July 2015. She and her employer have agreed to a salary sacrifice arrangement under which the employer will contribute $3,687.50 per quarter to Zoe's super fund. Of this amount, the employer is required by law to make super guarantee payments of $1,187.50 per quarter.
Zoe's employer makes its employer contributions to her super fund on the super guarantee quarterly cut-off dates – that is, on 28 October 2015, 28 January 2016, 28 April 2016 and 28 July 2016.
Zoe's employer must report the employer contributions in excess of the minimum super guarantee amounts on Zoe's annual payment summary as reportable employer super contributions. Reportable employer super contributions are reported for the year they accrued, not the year they were paid, so all four of the 2015–16 contributions are included (even though the last contribution was actually paid in the 2016–17 financial year).
Employer contributions ($3,687.50 x 4)
Less Zoe's super guarantee entitlement ($1187.50 x 4)
Reportable employer super contributions 2015–16
End of example
Records you need to keep
When you enter into a salary sacrifice agreement, you need to keep relevant documentation for five years. This includes:
- copies of your agreement
- documents showing any expenses.
An employee can 'sacrifice' part of their salary or wages into super contributions under an agreement with you. You then pay the sacrificed amount to your employee's super fund on their behalf.