Eligible individuals can now choose to nominate wages from certain employers to not be subject to the Superannuation Guarantee (SG) to avoid exceeding their annual concessions cap.
First announced in the 2018-19 Budget, the Treasury Laws Amendment (2018 Superannuation Measures No.1) Bill 2019 allows individuals, whose income exceeds $263,157 and have multiple employers, to nominate wages from certain employers to not be subject to SG obligations. Individuals with more than one employer, who expect that their compulsory super contributions will exceed the annual concessional contributions cap for a financial year, will be able to apply for an exemption certificate to release some of their employers from their SG obligations.
Individuals will still need to receive SG payments from at least one employer. From 16 October 2019, eligible individuals can download an application form from the ATO. The application will need to be submitted at least 60 days before the start of the quarter in which you wish to receive the exemption. The lodgment period for the quarter commencing 1 January 2020 was extended up until and including 18 November 2019.
The application form provides the Commissioner of Taxation with the information required to make an assessment. This includes which employers the exemption certificate will apply to and the quarter in the financial year for which the exemption is sought. Exemption certificates may be issued for multiple quarters within a financial year but cannot cover more than one financial year.
With an exemption certificate, an employer will not need to make SG contributions to avoid liability for the SG charge, however, it does not actively prevent the employer from making super contributions on behalf of the employee. The certificate does not change the employer’s obligations under a workplace agreement or an employer’s agreement with their super fund.
Employees will need to talk to their employers before making an application as this arrangement and any changes to payments will need to be negotiated.
If you have any questions about the information above please contact the team at Abbotts, we will be happy to assist you. You can find details to get in touch with us on our contact us page.