Super guarantee opt out for high income earners

Posted 30 Oct '19

Super guarantee opt out for high income earners

By Tui Silvester

Are you are high income earner with multiple employers?

Eligible employees may be able to opt out of receiving super guarantee from January 2020 if these contributions will cause them to have excess contributions.

An example of where this situation could occur is where an employee receives a salary of $200,000 from two different employers, SGC on this salary would be $19,000 from each employer, giving a total of $38,000 for the year. In this example the employee will have excess employer contributions of $13,000 (given a cap of $25,000) simply by their employers meeting their legal superannuation obligations.

To be eligible to opt out you must:

  • Have more than one employer, and
  • Expect that your employers' mandated concessional super contributions will exceed your concessional contributions cap for a financial year.

Eligible employees need to submit the SG opt out for high income earners with multiple employers form (NAT 75067) to apply for an SG shortfall exemption certificate. This certificate releases one or more of your employees from their SG obligations for up to four quarters in a financial year.

This certificate is not binding on employers however and they may choose to disregard the certificate. There could be a number of valid reasons for an employer to disregard the notice including their payroll software not being compatible with alternative superannuation arrangements or other internal policies, this is why it is important to discuss this with your employer before applying.

You also need to consider how your pay and other entitlements may change given your specific employment arrangements or awards you are paid under.

The application for an SG shortfall certificate must be made by the employee, it cannot be done by the employer and it must be lodged in the approved form at least 60 days before the first day of the first quarter the exemption relates to.

Once issued these certificates cannot be revoked. This gives the employer certainty in their obligations and allows for alternative remuneration arrangements to be made.

If you believe this applies to your circumstances and would like to discuss your options further please contact the office on 02 6921 5444.

Tui Silvester

Client Services Manager

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