Q: Can you please advise the 2009/2010 cap on earnings for the maximum contributions base?
A: The maximum superannuation contribution base for the 2009/10 year is $40,170 per quarter or $160,680 per year. This limit determines the maximum SG contribution that an employer is required to make under the super laws.
All eligible employees have a right to SG, although the amount of SG you receive is subject to this upper income limit, which is indexed each financial year.
Your employer must contribute 9 per cent of your salary only up to the maximum superannuation contribution base, which is linked to an individual’s earnings. The maximum contribution base is $40,170 each quarter (for the 2009/2010 year), which works out to be an annual income of $160,680. If your income for SG purposes exceeds $40,170 each quarter ($160,680 a year), your employer makes your SG contributions on the basis of the maximum contribution base.
Your employer doesn’t have to pay contributions under the SG rules for any earnings above this limit. For example, if you earn $200,000 a year, your employer doesn’t contribute 9 per cent of your $200,000, but 9 per cent of $160,680 (for 2009/2010 year), which works out to be $14, 461 a year or $3,615 each quarter (for 2009/2010 year).
Note: In most cases individuals on higher incomes receive super benefits as part of a salary package, which means SG contributions are based on a much lower figure than a person’s total remuneration anyway. The maximum contribution base is adjusted each year in line with increases in average wages. The base amounts for the previous 18 years appear in the table below. The table has been sourced from the ATO website.
|
SIGN UP TO OUR EMAIL NEWSLETTER for all the latest information, Q&As, and tips about superannuation. View latest newsletter | View previous newsletters
Copyright Trish Power
Related articles:
- Super concessional contributions: 2009/10 survival guide
- Your 2009/10 guide to non-concessional (after-tax) contributions
- Concessional contributions: SG and public servants
- Does shift work count for SG entitlements and insurance cover?
- Super for beginners, part 3: Why aren’t my super contributions tax-free?
Hi - I'm Trish Power and I am the author of