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Leo_Liu(Initiate)Initiate
26 Sept 2023

Hello All,


Seeking help on Super Guarantee Charge and Novated Lease.

There is a lot of interest in the business regarding novated lease for car thus we are looking at pros and cons and the admin side of things. Did search in the community but don't seem to have a clear answer so raising the question.


Based on info found, I gathered:

Salary Sacrifice into super doesn't reduce SGC Employer has to pay.

Salary Sacrifice other than super, i.e novated lease is considered FBT, reduces OTE base thus reduces SGC.


Can someone please confirm if above interpretation is correct? Thanks. Also, if it is the car an EV which is FBT exempt, would it reduce SGC still?


Threads I found below:

https://community.ato.gov.au/s/question/a0J9s0000001J7M/p00049790

https://community.ato.gov.au/s/question/a0J9s0000001GmK/p00040798


Appreciate the help.


Kind Regards

Leo Liu

6,338 views
5 replies
6,338 views
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Most helpful reply

WendyATO(Community Support)Community Support
27 Sept 2023

Hi @Leo_Liu,


Your understanding is correct for the salary sacrificing into super, doesn't reduce SGC the employer has to pay.


You're right again, a fringe benefit amount not contributed into a super fund is not looked at as OTE for SG. You can check this out under the ruling, SGR 2009/2 para 46 and others. In this case the employer pays SG on the reduced salary, which doesn't include the employees fringe benefit amount.

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Most helpful reply

WendyATO(Community Support)Community Support
27 Sept 2023

Hi @Leo_Liu,


Your understanding is correct for the salary sacrificing into super, doesn't reduce SGC the employer has to pay.


You're right again, a fringe benefit amount not contributed into a super fund is not looked at as OTE for SG. You can check this out under the ruling, SGR 2009/2 para 46 and others. In this case the employer pays SG on the reduced salary, which doesn't include the employees fringe benefit amount.

Leo_Liu(Initiate)Initiate
28 Sept 2023

Hello Wendy,


Thanks for the information. Just one more query, If fringe benefit is FBT Exempt (i.e. in this instance, Electrical Vehicles on novated lease), does it reduce SGC? Thanks. Unsure if it is:

A. FBT Exemption applies, thus not reducing SGC; or

B. It is Fringe Benefit so not OTE thus SGC reduced but given it is an exemption applies, don't pay FBT


Kind regards

Leo Liu

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