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Maximum super

ShelleyG

We have just put on a staff member whose salary is large enough for the Maximum super payment to come into play. I know that you can put the annual maximum figure on their employee file which will then cause super to stop calculating when it hits that, but is it not a requirement to do it qtrly?

Is it common practice to then add the super to the salary so that they are still essentially being paid the same? If so, how can you manage this within the payroll

Comments

Reeta Paudyal

Hi ShelleyG,

I believe you can generally contribute up to $27, 500 each financial year .

I strongly recommend consulting your accountant to provide further detailed information and to ensure compliance with relevant regulations.

Kind regards,

Reeta

ShelleyG

Thanks for your reply. You can still pay super after that but the employee will need to pay a higher margin on the additional. However this employee said that in past employment any additional super was paid directly to them as part of their salary. My question was really about is this common and how you would manage it within the payroll program.

cosmic

You will pay excess super contributions tax if you exceed your super cap.

You need to talk to your tax accountant.

Not here pls

ShelleyG

Im not planning to exceed the super cap. I wanted to know how people manage this within the system besides just putting the cap amount in the employee file.

Acctd4

Super can only be paid into a complying fund, not direct to an employee. I think what the employee means is that he was paid the amount as "wages" instead (which will have PAYG deducted)

If an employee is a high income earner & believes their super contributions may exceed the cap , the employee can apply to the ATO for an exemption certificate to "opt-out" of SGC (compulsory employer super).

Note this is NOT something the employer can do, the application must be made by the employee themselves & if approved, the relevant employer(s) will then receive communication from the ATO confirming this:

https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/growing-and-keeping-track-of-your-super/super-from-your-employer/super-guarantee-opt-out-for-high-income-earners-with-multiple-employers

(You may need to copy & paste the above into your browser as it's not displaying as a clickable link)

A limit can be set in the employee file however it can only be set to apply either per pay period or per month, (not per qtr) & - according to the info on it - the monthly selection is actually only applicable in the opposite scenario eg it won't accrue until an employee's earnings reach the limit amount! Therefore, the limit option would likely not work for you anyway.

Instead, I would just keep an eye on the employee's YTD super contribution amounts & balance via a customised report, which you could set to display per quarter & Memorise 😊

@Rav Posted links aren't working again for me 🙄

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