December 17, 2019   |   Super

Salary sacrifice and superannuation guarantee

From 1 January 2020, salary sacrifice contributions to an employee’s superannuation, cannot be used to reduce your minimum superannuation guarantee contributions as an employer.

As an employer, when it comes to superannuation guarantee (SG), the salary sacrificed amount will not count towards your superannuation guarantee obligations.

Therefore, calculating superannuation guarantee contributions in the following way will no longer be acceptable;

  1. On the employee’s taxable salary (i.e. after salary sacrifice amounts have been deducted); or
  2. Taking an employee’s salary sacrifice amounts into consideration when calculating the required superannuation guarantee contributions. For example, using the salary sacrifice amounts as or contributing to the employer’s minimum superannuation guarantee contribution to an employee.

What about other salary sacrifice arrangements?

In case you were wondering whether or not this impacted other salary sacrifice arrangements, the short answer is no.

Non-superannuation related salary sacrifice amounts, i.e. novated lease, childcare fees etc, are still deductible from the employee’s ordinary time earnings base, reducing the superannuation guarantee contributions owing to that employee.

For more information, visit the ATO website.