High-income and multiple employers?

Written and accurate as at: 14 November 2019

The 2019-20 concessional contributions (CC) cap is $25,000 per annum. The CC cap includes personal deductible contributions and employer contributions, such as Super Guarantee (SG), voluntary and salary sacrifice.

For most employees, an employer is required to contribute 9.5% equivalent of their salary each year as SG contributions. Although, a limit applies; the maximum super contributions base. An employer is only required to pay super on income of up to $55,270 per quarter (roughly $221,080 per annum) in 2019-20; this equates to SG of up to $5,250.65 per quarter (roughly $21,002 per annum). However, given above, there is the chance that high-income earners with multiple employers may exceed their CC cap for a financial year. As such, new legislation* seeks to address this, which is briefly outlined below.

Employees can apply for an exemption certificate to release an employer from their SG requirements for a quarter (from 1 January 2020), if they expect their employers’ SG will exceed their CC cap for a financial year. This may open up employee-employer negotiations regarding extra cash/non-cash remuneration instead of SG.

*Treasury Laws Amendment (2018 Superannuation Measures No. 1) Act 2019.