Effective from 1 January 2020, the Superannuation Guarantee (Administration) Act 1992 will no longer allow salary sacrifice super amounts to reduce an employee’s OTE or offset super contributions that employers are required to pay. As such, any business that currently has their salary sacrifice super deduction set up to reflect this will need to update their deduction setting accordingly.
Specifically, there are 2 changes:
- Salary sacrificed super contributions will no longer reduce the ordinary time earnings an employer is required to calculate an employee’s Super Guarantee liability on.
- Salary sacrificed super contributions will no longer count towards the amount of Super Guarantee contributions an employer is required to make for them to avoid the super guarantee charge.