Salary Sacrifice Integrity Measures

Schedule 2 of the Bill amends the Superannuation Guarantee (Administration) Act 1992 to ensure that an individual’s salary sacrifice contributions cannot be used to reduce an employer’s minimum superannuation guarantee contributions.

The amendments provide that amounts an employee salary sacrifices to superannuation cannot reduce an employer’s superannuation guarantee charge. Salary sacrificed amounts will also not form part of any late contributions an employer makes that are eligible to be offset against the superannuation guarantee charge.

The amendments introduce the concept of the “quarterly salary or wages base”. This concept applies to an employer in respect of an employee and is the sum of the total salary or wages paid by the employer to the employee for the quarter, and any salary or wages amounts of the employee for the quarter in respect of the employer that have been sacrificed into superannuation. The inclusion of sacrificed salary or wages amounts ensures that the shortfall and charge is calculated on the pre-salary sacrifice base and that employers cannot calculate their superannuation guarantee obligations on reduced salary and wages.

These amendments apply when calculating an employer’s superannuation guarantee shortfall for quarters beginning on or after 1 July 2018.