Making Additional Or Extra Super Contributions To Your Employees? Here’s What You’ll Have To Report

Posted on 19 November '21 by , under super.

If you are an employer who makes additional or extra super contributions, you are required to report them through Single Touch Payroll (STP) or on the employee’s annual payment summary.

However, there are two kinds of super contributions that can be made – reportable and non-reportable. As an employer, it’s important to know the difference between the two as they could affect your and your employees’ returns.

Reportable Employer Super Contributions

Reportable employer super contributions (RESC) are contributions that are not included in your employee’s assessable income. They do not affect the way that your super contributions for your employees are calculated.

The following are types of employer super contribution that are reportable:

  • Additional contributions as part of an employee’s individual salary package
  • Additional contributions under a salary sacrifice arrangement
  • Pre-tax amounts paid to an employer’s super fund at the employee’s direction, such as directing an annual bonus into super.

Extra contributions must be reported by employers if:

  • The employee that you are paying the contributions to can influence the rate or amount of super that you contribute for them, and
  • The contributions are in addition to the compulsory contributions you must make under the super guarantee, a collectively negotiated industrial agreement, the rules of a super fund or federal, state or territory law.

The extra contributions are reportable super contributions unless you show that:

  • The extra contributions are made for administrative simplicity
  • A documented policy is in place that does not allow an employee to influence the contributions that you make on their behalf

Non-Reportable Employer Super Contributions

The following employer super contributions are not reportable, however, and should not be included on the employee’s assessable income:

  • super guarantee contributions
  • contributions required by collectively negotiated industrial agreements
  • matching contributions under a collective agreement (but matching contributions under an individual agreement are reportable)
  • to a defined benefit fund (exceptions may apply)
  • contributions required by super fund rules or a law
  • extra contributions that the employee could not influence, such as extra contributions for administrative simplicity or accepted employer policy
  • contributions from the employee’s after-tax income

Keep Your Records Up To Date

In order to ensure that you are remaining compliant with super contributions for your employees, you must keep accurate records. This will show whether your employee influenced the super contributions you made on their behalf.

This may include records of:

  • How you calculated reportable employer super contributions
  • How you calculate the employee influenced portion of the total employer contribution
  • How you calculated your employee’s salary or ordinary time earnings (OTE)
  • Relevant salary sacrifice agreements
  • Relevant industrial agreements

These records must be kept for 5 years after they are prepared, obtained or the transactions are completed, whichever occurs last.

Reportable employer super contributions are not included in your employees’ assessable income. Ensure that you are doing the right thing by your employees when it comes to their super by having a conversation with us, to be sure that you are acting in compliance with what is needed.