Private ruling: Reportable employer superannuation contributions
Published: September 2013
Ruling period: 2012-13 income year
Date scheme commenced: 1 July 2012

Ruling: Q1: Is the whole of the amount that is shown on your PAYG payment summary as a reportable employer superannuation contribution to be treated as a reportable employer superannuation contribution? | A1: No.

Relevant facts and circumstances: This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling. Your employer has an arrangement with its employees under an Enterprise Agreement. Under this agreement, your employer pays superannuation contributions in excess of the superannuation guarantee provided that the employee makes additional superannuation contributions, either pre or post tax. The following is an extract from the Enterprise Agreement: The Employer and employees acknowledge that there is a joint responsibility for contributing to employees' retirement provisions. Where an employee contributes an additional percentage of their salary into superannuation, the Employer will contribute an additional percentage of salary above the Superannuation Guarantee Charge into that employee's superannuation account as per the following: Employee contribution Employer Contribution 2% 9.75% 3% 10.75% 4% 11.75% 5% 12.75% The Employer's additional contribution is contingent upon the employee's contribution. The employee's contribution may be paid using the provisions of the salary sacrifice provision outlined in another Clause. Your PAYG payment summary for the 2012-13 income year showed an amount as reportable employer superannuation contributions. The amount mentioned above consisted of: · an amount salary sacrifice by yourself - being 5% of your salary for the relevant period. You agree that this amount should be included as a reportable employer superannuation contribution · an amount of extra co-contribution by the employer at the rate of 3.75% as you contributed 5% in the short period that you worked for them in the 2012-13 income year · an amount of extra co-contribution by the employer not previously paid for the 2011-12 income year. (Missed originally. It was payable as you contributed 5% of your salary to superannuation in that period These amounts were paid into your self managed superannuation fund by your employer.

Relevant legislative provisions: Taxation Administration Act 1953 Section 16-182 of Schedule 1.

Reasons for decision: Summary: Only part of the amount that is shown on your PAYG payment summary as a reportable employer superannuation contribution is to be treated as a reportable employer superannuation contribution. | Detailed Reasoning - Reportable employer superannuation contribution - the law: A 'reportable employer superannuation contribution' for an individual for an income year, is an amount that has been, is, or will be contributed in respect of the income year: · by an employer of the individual, or an associate of the employer, for the individual's benefit · to a superannuation fund or an RSA to the extent that either or both of the following paragraphs apply: · the individual has or has had, or might reasonably be expected to have or have had, the capacity to influence the size of the amount · the individual has or has had, or might reasonably be expected to have or have had, the capacity to influence the way the amount was, is or will be contributed so that his or her assessable income is reduced. An individual is not considered to have, nor are they reasonably expected to have, the capacity to influence the size of the amount if: · the employer or associate is required to contribute the amount by: · an industrial instrument, or · the rules of a superannuation fund, and · the individual does not have, and is not able reasonably to be expected to have or have had, the capacity to influence the content of that instrument or those rules, to the extent that the instrument or rules relate to: · the requirement to contribute the amount, or · the size of the amount. 'Industrial agreement' means: · an Australian law, or · an award, order, determination or industrial agreement in force under an Australian law. | Detailed Reasoning - Capacity to influence: If you enter into an arrangement with your employer for them to contribute more superannuation than they are required to, then you will be considered to have the 'capacity to influence' the amount of contributions made. Your capacity to influence will be shown by: · your relationship with the employer · your involvement in the negotiations concerning the terms of any industrial agreement governing the superannuation contributions · the size of the amount the employer contributes for you relative to the compulsory contributions the employer is required to make · the superannuation contribution arrangements the employer has in place for other employees · any non-arm's length dealings. Generally, you will not be taken to have the capacity to influence the amount of superannuation contributions your employer makes on your behalf where the employees simply vote for a collective agreement, or are part of a group that negotiates a collective agreement with the employer. You will be taken to have influenced the amount of contributions your employer makes on your behalf where you can directly negotiate, or have an option to directly negotiate, an employer superannuation contribution in excess of the compulsory contributions. | Detailed Reasoning - Matching employee superannuation contributions under an Australian law: Reportable employer superannuation contributions do not include contributions an employer makes on behalf of their employees that are required by an industrial agreement or the rules of a superannuation fund. If the employer is required to make additional contributions as a result of an industrial agreement or rules of a superannuation fund, and neither the employer nor the employee can control the amount of the contribution other than by choosing what is detailed in the agreement, it will not be a reportable employer superannuation contribution. | Detailed Reasoning - Your situation: The employer superannuation contributions are payable by your employer in accordance with the Enterprise Agreement - an enterprise agreement approved under the Fair Work Act 2009 . The salary sacrifice component of your employer's superannuation contributions is a reportable employer superannuation contribution because: · This component is your member contribution under the Enterprise Agreement · You can choose to make this contribution from either your pre-tax income (as a salary sacrifice) or from your post-tax income · You have chosen to make your member contribution from your pre-tax income · Making the contribution in this way reduces your assessable income. The extra co-contribution components of your employer's superannuation contributions are not reportable employer superannuation contributions because: · The Enterprise Agreement is an industrial agreement · You were not in a position to influence the content of the superannuation related clauses of the Enterprise Agreement · The extra co-contributions are required to be paid by your employer under the Enterprise Agreement · The amount of the extra co-contributions is determined by the amount of your member contributions under the Enterprise Agreement · The amount of your member contribution is determined by a choice that you make under the Enterprise Agreement · It does not matter that your member contributions were made by way of salary sacrifice.