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Making Additional Or Extra Super Contributions To Your Employees? Here’s What You’ll Have To Report

If you are an employer who makes additional or extra super contributions, you are required to report them through Single Touch Payroll (STP) or on the employee’s annual payment summary.

However, there are two kinds of super contributions that can be made – reportable and non-reportable. As an employer, it’s important to know the difference between the two as they could affect your and your employees’ returns.

Reportable Employer Super Contributions

Reportable employer super contributions (RESC) are contributions that are not included in your employee’s assessable income. They do not affect the way that your super contributions for your employees are calculated.

The following are types of employer super contribution that are reportable:

  • Additional contributions as part of an employee’s individual salary package
  • Additional contributions under a salary sacrifice arrangement
  • Pre-tax amounts paid to an employer’s super fund at the employee’s direction, such as directing an annual bonus into super.

Extra contributions must be reported by employers if:

  • The employee that you are paying the contributions to can influence the rate or amount of super that you contribute for them, and
  • The contributions are in addition to the compulsory contributions you must make under the super guarantee, a collectively negotiated industrial agreement, the rules of a super fund or federal, state or territory law.

The extra contributions are reportable super contributions unless you show that:

  • The extra contributions are made for administrative simplicity
  • A documented policy is in place that does not allow an employee to influence the contributions that you make on their behalf

Non-Reportable Employer Super Contributions

The following employer super contributions are not reportable, however, and should not be included on the employee’s assessable income:

  • super guarantee contributions
  • contributions required by collectively negotiated industrial agreements
  • matching contributions under a collective agreement (but matching contributions under an individual agreement are reportable)
  • to a defined benefit fund (exceptions may apply)
  • contributions required by super fund rules or a law
  • extra contributions that the employee could not influence, such as extra contributions for administrative simplicity or accepted employer policy
  • contributions from the employee’s after-tax income

Keep Your Records Up To Date

In order to ensure that you are remaining compliant with super contributions for your employees, you must keep accurate records. This will show whether your employee influenced the super contributions you made on their behalf.

This may include records of:

  • How you calculated reportable employer super contributions
  • How you calculate the employee influenced portion of the total employer contribution
  • How you calculated your employee’s salary or ordinary time earnings (OTE)
  • Relevant salary sacrifice agreements
  • Relevant industrial agreements

These records must be kept for 5 years after they are prepared, obtained or the transactions are completed, whichever occurs last.

Reportable employer super contributions are not included in your employees’ assessable income. Ensure that you are doing the right thing by your employees when it comes to their super by having a conversation with us, to be sure that you are acting in compliance with what is needed.

If you’re someone who often finds it difficult to make large lump sum payments for goods or services, you may want to consider looking into “Buy Now Pay Later” services.

Buy now pay later essentially means that, rather than paying in a full lump sum payment for a product or services rendered, there may be an option to pay through instalments of a certain amount over a set period to make the sum of the full amount in total. This method should allow you to pay in full for the product or service without overly straining your finances – you pay back what you can, as agreed upon when you begin the buy now pay later service.

Some popular buy now pay later services include Afterpay, Zip Pay, Brightepay, and some credit card networks such as  Mastercard and Visa, can offer buy now pay later arrangements.

Though it can be a convenient, immediate solution, it may be challenging to juggle the necessary repayments with other financial commitments. It’s not always the most appropriate method for people, and you should bear in mind your situation and ability in paying back the amounts. 

Before you sign up, keep in mind: 

  • It becomes easier to overspend with buy now pay later services, so know your limits on what you can and can’t afford.
  • You will be charged fees and costs to use the service, which can add up to a princely sum in and of itself.
  • Keeping track of your payments can be tricky if you’ve signed up for multiple services.
  • It could affect your loan applications for a car or mortgage as lenders consider buy now pay later spending just as much as your credit score.
  • Late repayments can appear on your credit report, which affects your ability to borrow money in the future.
  • Layby can be a cheaper alternative to buy now pay later, with no account-keeping or late fees to consider

If you are someone who could make use of BNPL services, you may wish to:

  • Ensure that when using the BNPL service, you stick to a set limit on what you spend so that you can comfortably pay it back later. 
  • Aim only to have one BNPL account at a time to manage payments through, rather than confuse yourself with multiple payments across different providers.
  • Always budget for bills, loan payments and BNPL payments, and 
  • Rather than use your credit card for payments to your BNPL account, consider linking to your debit account instead.

If you would like assistance in planning your financial future, help in managing your budget or some friendly advice, see us for a chat about what we can do for you.

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John Briggs

Jane Noller has been my accountant for the last 15 plus years. I can testify to Jane’s professionalism and expeditious manner in dealing with the day to day issues that surrounds our business accounting.

John Briggs

Registered Building Certifier