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  • Extra contributions without employee influence

    There may be circumstances where you pay more super than required because of:

    • an employer policy or similar arrangements
    • administrative or payroll simplicity.

    Provided your employee doesn't have the capacity to influence these contributions, they are not reportable. It doesn't matter if the employee is employed under a collectively negotiated industrial agreement or individual employment contract.

    Example: Extra contributions under employer policy

    Clarke Pty Ltd employs different types of workers on individual contracts and collective industrial agreements. Clarke Pty Ltd has always paid employer contributions at a minimum rate of 12% of salary, regardless of whether the employee is on an individual contract or a collectively negotiated agreement. Employees are not able to negotiate an employer contribution rate lower than 12%.

    The company policy is long standing and is documented in Clarke Pty Ltd's record-keeping system. No employee is receiving less than 12% employer contribution support.

    The 12% employer super contributions are not reportable because the employees have no influence over the contribution rate. Clarke Pty Ltd must document how it worked out that the employees did not influence the minimum contribution rate.

    If employees do have the power to vary their employer contribution rate, the amounts over any compulsory contributions made will be reportable employer super contributions.

    End of example


    Example: Extra contributions for administrative simplicity

    Vangie employs several full-time and casual employees in her business. Some of her casual employees rarely earn more than $450 in a calendar month, which means Vangie doesn't have to make super guarantee contributions for them.

    Vangie's payroll system automatically calculates super contributions for her employees at the rate of 9.5% of their ordinary time earnings, even if they earn less than $450 in a calendar month. This means Vangie is making super contributions for some employees even though she doesn't have to. She does this because it's easier under her payroll system.

    Vangie's employees have no choice about how much super she contributes on their behalf, so the contributions are not reportable employer super contributions.

    End of example

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      Last modified: 29 Oct 2019QC 21716