Hi, I understand there is a cap on concessional contributions (which is $30,000 since 1 July 2024). Is the super guarantee that the employer is legally required to put in taken into account when determining whether this cap is exceeded? If so, what happens if the super guarantee itself already exceeds this cap? Is there any punishment for exceeding this cap? Thanks a lot!
Hiya @lkw0113 👋
Yes, the employer super guarantee contribtion counts towards the concessional cap.
ATO guidance details out what happens when the annual concessional cap is exceeded.
Deanne
Hiya @lkw0113 👋
Yes, the employer super guarantee contribtion counts towards the concessional cap.
ATO guidance details out what happens when the annual concessional cap is exceeded.
Deanne
You have some useful links from @PayrollDeanne in the previous response.
I'd also add that some employers recognise this difficulty, @lkw0113 , by allowing a highly-compensated employee to receive some of the 11.5 per cent as normal taxed salary. It could be worth exploring this with your employer(s); your total remuneration would remain the same and you'd avoid the "must withdraw some super" challenges.
Problem solves itself.
30,000 / 11.5% = 260,869 = 65,217 per SG quarter, which is more than:
Max salary cap for SG = 65,070 per quarter.
65,070 x 1.5 % = 7,483
So employer does not have to pay SG above 7,483 per quarter for employee.
Maximum super contribution base
Income yearMaximum contribution base (maximum income per quarter for SG purposes)
Maximum SG payment amount per quarter 2024–25 $65,070
Yes, Maximum Contribution Base applies to legislated OTE but doesn't apply to industrial OTE. 😉
If there's an Award or Agreement that requires the employer to contribute SG for payments that aren't legislated OTE, or at a higher SG rate, then the concessional caps may still be exceeded. 🙂
But talking to the employer is always an excellent step to take. 🤓
Deanne
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