Please advise if anyone can -
Does a Not For Profit company need to pay the super for the ENTIRE salary including the $15.900 which is the tax free amount on the salary?
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Hiya @leefree62 👋
NFPs have the same superannuation guarantee obligations as all businesses.
I think your question is about salary sacrifice to other employee benefits (not to super), such as motor vehicles?
No, fringe benefits are not ordinary time earnings upon which SG contributions are calculated, as per the ATO SGR 2009/2 paragraph 58.
The ATO has a free employer SG online course to help you get your SG obligations right 😉
Deanne
There was an update on this in January 2020.
Salary sacrifice and super guaranteee
That confirms that salary sacrifice of OTE to a complying super fund is OTE. Salary sacrifice of non-OTE to a complying super fund is not OTE.
Salary sacrifice to other employee benefits (that is, not to a complying super fund) is excluded salary or wages, that is, not OTE.
🤓 Deanne
All employers, including NFP, are required to comply with the minimum superannuation guarantee regulation.
The minimum superannuation guarantee is 12% of the total gross salary before salary packaging arrangement i.e. you pay super on then $15900.
See Salary sacrifice arrangements and not-for-profits | Australian Taxation Office
@MACH, refer to the ATO guidance for:
Payments that are OTE-salary sacrifice
Deanne
Hey all, I thought I'd jump in here as well.
When referring to salary sacrifice to non-super benefits like cars or mortgages, those things aren’t considered Ordinary Time Earnings (OTE) and don’t attract Super Guarantee (SG), which is correct.
@leefree62, I ran your question past our super experts, and they confirmed that yes NFPs are required to pay SG on the full pre-salary sacrificed earnings, including the $15,900, if it’s part of the employee’s OTE.
You can refer to example 2 in the General notice 2020/1.
From 1 January 2020, employers have to count those SG payments on their employee's ordinary time earnings (OTE) base.
OTE base is the total sum amount of the employees OTE and any OTE amounts they sacrifice in return for super contributions.
This means that the SG payment must be paid on the pre-salary sacrificed earnings.
Salary sacrifice contributions are additional to an employee's SG entitlements. So, employers still have to pay the employee’s full super guarantee amount, as if there was no salary sacrifice for super.
If you're unsure how to calculate or pay employees SG amounts a registered tax or BAS agent can definitely help.
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