New rules for salary sacrificing to super

For some employees, sacrificing part or all of their salary to a complying superannuation fund is a great way to boost retirement savings. But two recent changes may affect your obligations as their employer.


18 February 2020

These changes, effective from 1 January 2020, relate to how you work out your superannuation guarantee (SG) obligations when an employee makes super contributions by salary sacraficing.

The changes are:

  1. The amount your employee sacrifices into super no longer counts towards the amount of SG you are required to pay for them.
  2. The amount of SG you must pay is 9.5% of:
    • your employee's ordinary time earnings (OTE) which is the amount they are paid based on ordinary hours of work, and
    • the amount salary sacrificed from the employee's OTE to their complying super fund or Retirement Savings Account.

If you haven't already done so, revisit your agreements with employees to make sure you're meeting the new rules and paying the right amount of SG. This may include checking and updating your systems to make sure they calculate the SG amount correctly.

You can continue to claim a tax deduction for salary sacrificed super contributions and the sacrificed amounts won't be subject to fringe benefits tax.

If you have any questions then your accountant, registered tax agents and BAS agents can help.


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