If you salary sacrifice, your employer may not have to pay any compulsory super at all.
In other cases, employers can calculate their compulsory contribution on your reduced salary sacrificed salary.
Employers can even hold on to an employee’s sacrificed money up to 12 months before transferring it to their super fund.
The Australian Tax Office (ATO) says these practices are legal.
Even Australian Public Service employees are at risk, particularly new public servants who have commenced since July 2005.
Employees face reduced compulsory employer contributions in two ways:
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The refusal of the Howard Government to mandate employers pay the 9% compulsory superannuation guarantee payment on their employees pre-salary sacrifice income, and |
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Under Work Choices, the removal of entitlements such as weekend penalties and shift allowances or minimum hours of work will reduce an employee’s ordinary times earnings, the earnings used to calculate their 9 % superannuation guarantee payment. A consequence of employees losing these entitlements means their compulsory superannuation payments are reduced. |
In respect of the first point Labor will prohibit this practice and on the second Work Choices will be repealed and replaced with a simple and fair safety net for Australian employees.
Contact: Rachel Allen 0418 488 295
