If you or your employer pays extra money into your superannuation account, you may be required to report that to the Australian Taxation Office (ATO). We take a look at what reportable superannuation contributions are, and who is responsible for declaring them.
Superannuation is money that’s put aside in a superannuation fund, designed to help fund your retirement. Your employer is required to pay a certain amount into your nominated super fund, as part of the Superannuation Guarantee provisions.
However, it is possible for your superannuation balance to be boosted by other types of contributions, such as extra payments made by you or your employer. In some cases, these extra payments are known as “reportable employee super contributions” (RESC), which means that they have to be reported to the ATO.
Understanding different types of super contributions, and how they are considered by the Australian Taxation Office (ATO), can be helpful for employers and employees when working out what needs to be reported.
What are reportable employer super contributions?
Reportable employer super contributions (sometimes shortened to RESC) are super contributions made by your employer over and above legislative requirements in Australia that need to be reported to the ATO.
According to the ATO, reportable super contributions include any contributions to your superannuation when both of these criteria apply:
- an employee influences the rate or amount of super a company contributes for them
- the contributions are additional to the compulsory contributions a company must make under the Superannuation Guarantee; a collectively negotiated industrial agreement; the rules of a super fund; or a federal, state or territory law.
Examples include additional contributions as part of an individual’s salary package, extra money that’s put into super through salary sacrificing, and pre-tax super contributions, like putting an annual bonus into your super account.
Reportable vs non-reportable employer super contributions
Most workers are eligible for the Superannuation Guarantee (SG), which means that employers must pay 9.5% of an employee’s earnings into their super account if they earn at least $450 before tax in a calendar month, regardless of whether they work full-time, part-time or casually.
This is considered a non-reportable contribution. Other non-reportable super contributions include compulsory super contributions required by national, state or territory law in Australia, or by a super fund’s governing rules, as well as any contributions made under collectively negotiated industrial agreements. These are all forms of non-concessional (after-tax) contributions.
According to the ATO, any non-concessional (after-tax) contributions you make are not reportable because that money has already been subject to tax.
Concessional contributions are those made before any tax has been applied. Examples of this type of contribution includes salary sacrifices, which is where money is taken from a person’s salary before income tax has been applied and is then added to their super fund.
These types of contributions must be reported to the ATO, which will determine if tax needs to be applied.
Here are some common examples of superannuation contributions that are either generally reportable, or generally not reportable, for Australian employees.
The ATO gives these examples on a general basis only. It may be suitable, based on your personal needs and requirements, to seek professional advice relating to your tax if you have further questions.
Related: What are concessional contributions?
How do reportable employer super contributions impact Australians?
According to the ATO, reportable super contributions affect the income tests for various tax offsets, deductions, concessions, the Medicare levy surcharge, and certain government benefits and obligations.
This includes Higher Education Loan Program (HELP) and Student Financial Supplement Scheme (SFSS) repayments, tax offsets for a variety of super contributions, the entrepreneurs’ tax offset and wider benefits from Services Australia, including for Centrelink and child support.
An employee’s reportable super contributions amount is also considered with several offsets that impact many older Australians, such as the pensioner tax offset, mature age worker tax offset and senior Australians tax offset. It could be a wise idea to seek professional financial advice about super contributions.
What do employers and employees need to do about reportable employer super contributions?
Employers, employees and both investors and business operators have various obligations with reportable employer super contributions (RESC).
The ATO publishes a guide for employees and the self-employed about reportable employer super contributions, as well as a guide for employers about reportable employer super contributions, with more details.
Fee, performance and asset allocation information shown in the table above have been determined according to the investment profile in the Canstar Superannuation Star Ratings methodology that matches the age group you selected.
Cover image source: wutzkohphoto/Shutterstock.com
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