Additional Employer Contributions To Offset SG Obligations

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(Newbie)Newbie

6 Apr 2021

If an award states that the employer will contribute an extra 3.75% super for the employee if the employee salary sacrifies super at an amount greater than 6% ot their salary, and that employer is not paying SG on leave loading (assume leave loading is OTE), can the employer offset the SG shortfall created from not paying SG on the leave loading with the addtional 3.75% contributions that they are making?

Please direct me to rulings, guidance notes or legislation?

Many Thanks

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BlakeATO

(Community Support)Community Support

7 Apr 2021

Hi @chapman-stone

Your employer must pay 9.5% SG on your ordinary time earnings. This includes leave loading if it does not demonstrably represent a loss of overtime. Where an award states additional contributions must be made, these are on top of the SG amount.

For you, your employer must make 9.5% SG payments on your OTE, plus 3.75% on top of that if you meet the requirements of your award.

Previously, salary sacrificed amounts counted towards the employer meeting their super guarantee amounts. This changed on 1 January 2020, and now no longer applies. If your award is older, or your employer isn't aware, they may be acting under this premise.

Under Article 5B of the Superannuation Guarantee (Administration) Act: nothing in this Act... affects the jurisdiction, functions or powers of the Fair Work Commission. Fair Work can mandate things in addition to the Super Guarantee Act. The Super Guarantee Act rules cannot override Fair Work's direction.

This is covered under how much to pay and salary sacrificing super on our website. Fair Work talks about it under tax and superannuation. You can read the Superannuation Guarantee (Administration) Act 1992 on the Federal Register of Legislation, too.