What are reportable superannuation contributions?

What are reportable employer super contributions?

Reportable employer super contributions (sometimes shortened to RESC) are superannuation contributions made by your employer over and above legislative requirements in Australia and need to be reported to the Australian Taxation Office (ATO).

According to the ATO, reportable super contributions include any contributions to your superannuation when both of these criteria apply:

1. An employee influences the rate or amount of super an employer contributes for them
2. The contributions are additional to the compulsory contributions an employer 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.

If you’re interested in comparing your super fund options, you can do so by using Canstar’s super fund comparison tool. It’s important to read any relevant documentation, such as the Product Disclosure Statement (PDS) and Target Market Determination (TMD), for any super fund product you’re considering.

Reportable vs non-reportable employer super contributions

All employees over 18 years of age are eligible for the Superannuation Guarantee, which means that employers must pay a percentage of an employee’s earnings into their personal super account, regardless of whether they work full-time, part-time or casually. Employees under the age of 18 can also be eligible for the Superannuation Guarantee if they work over 30 hours a week. 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 include 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. This type of contribution must be reported to the ATO, which will determine if tax needs to be applied.

According to the ATO, some examples of reportable contributions include:

• Additional contributions made as part of an employee’s individual salary package

• Additional contributions under a salary sacrifice arrangement (i.e. the First Home Super Saver Scheme (FHSS))

• Pre-tax amounts paid to an employee’s super fund at the employee’s direction, such as contributing their annual bonus into their super account.

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 any further questions.

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 (MLS), 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 wise to seek professional financial advice about super contributions and how they could affect your tax.

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. The ATO publishes a guide for employees and the self-employed in regards to reportable employer super contributions, as well as a guide for employers. You can also contact the ATO directly or consult a tax professional if you have any further questions.