To ensure fairness in the application of income tests and to ensure that the government assistance is consistent and fair based on gross incomes, the Federal Government requires employers to record the reportable employer superannuation contributions figures on payment summaries from the financial year 2009-10 onwards.
Reportable Employer Superannuation Contributions (RESC) are the portion of the employer contribution that the employee has influenced, for example superannuation contributions made by the employer under the terms of a salary sacrifice agreement, made in a financial year (1 July to 30 June) to a superannuation fund for an employee.
Reportable employer superannuation contributions do not include – super guarantee contributions (SG), contributions mandated by industrial agreements that the employee does not influence, or post tax member contributions.
Which types of super payments are RESC?
Legislative Employer Contributions (Super Guarantee (SG)) – No
Refers to the federal legislation based employer contribution of 9.50% in 2015-2017 tax years currently. Known as Concessional Contributions – the employer gets a tax concession (deduction) at year end.
Group Contract Employer Contributions such as a Collective Agreement – No
Refers to agreement such as those found in awards and enterprise bargaining documents that result in all affected employees being entitled to a greater employer contribution.
Employee Personal Deductions – treated as an AFTER tax deduction – No
The Gross Payment amount on the employee’s payment summary is not reduced by this deduction. It is also known as Non-Concessional contribution.
Additional Employer Contributions BEFORE tax – Yes
These are contributions which exceed what the employer needs to contribute. The effect is for the gross payment to the employee is lower than what it would otherwise had been. Also known as Concessional Contribution.
Employee Personal Deductions – treated as a BEFORE tax deduction – Yes
This is known as a salary sacrifice deduction and results in the Gross Payments figure on the employee’s payment summary being reduced. Also known as Concessional Contribution.
NOTE – Superannuation Guarantee Act exempt employees – YES – If employee negotiated or influenced
If the employer chooses to pay superannuation for SGA exempt employees, those contributions will be reportable as RESC only if the employee has negotiated and influenced the decision of the employer.
If the employer has made the decision themselves to go ahead and pay super in the above scenarios even though they may not be required to (by award or collective agreement), then that super will not be reportable as long as the employer can substantiate that this was done for example for Administrative Simplicity and it has not been influenced by the employee.
For more information refer to ATO for Reportable Superannuation Contributions – Instructions for employers (NAT 72916)
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