02 8824 4363


New rules for salary sacrificing to super

Posted by Team AVS on 10 Mar, 2020  0 Comments

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.

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 sacrificing. 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, feel free to ask them in the comment section. We will be happy to answer all your queries.


Leave a Reply

Your email address will not be published. Required fields are marked *

Disclaimer : All the content (including Blogs, newsletters, Fact sheets, calculators etc.) provided on this website is general information only and is neither intended to nor be considered personal financial or taxation advice. The content has been prepared without taking into account your personal circumstances, financial situation or objectives. In making any financial, investment or taxation decision, information provided on this website should not be relied upon and you should seek personal advice. AVS Business Services Pty Ltd disclaims any responsibility for any decision that you make, based on the information provided on this website.All the information provided on this website is prepared in good faith and based on AVS’s knowledge and understanding of superannuation, taxation and other relevant laws and is believed to be correct at the time of writing the information. However as the laws, being dynamic by nature, keeps on changing, you should not rely on the information provided on this website without first obtaining advice from qualified professional.