ATO reporting for salary sacrifice and additional employer super contributions

The ATO also uses RESC when calculating tax offsets and liabilities, including the Medicare levy surcharge, senior Australians tax offset (SAPTO), spouse super contributions tax offset, super co-contributions, low income super tax offset, Division 293 tax, HELP and Student Financial Supplement repayments.

What super contributions are reportable?

You are required to report RESC to the ATO if the:

• Super contributions are more than you are required to pay under super law; an industrial agreement; the super fund’s governing rules; or federal, state or territory law
• The employee has the capacity to influence the rate or amount of super you contribute for them.

In general, the employer super contributions that are reportable include:

• Additional contributions made as part of your employee’s individual salary package
• Additional contributions made under a salary-sacrifice arrangement
• Before-tax amounts paid to your employee’s super fund at their direction, such as directing an annual bonus to be paid as a super contribution
• Matching contributions made under an individual agreement.

What super contributions are not reportable?

Super contributions you make for your employees that are generally not reportable include:

• Super Guarantee (SG) contributions
• Super contributions required by collectively negotiated industrial agreements
• Matching contributions made under a collective agreement
• Contributions required by the law or the rules of a super fund
• Compulsory contributions to most defined benefit super funds
• Extra contributions your employee can’t influence (such as an extra contribution made for administrative simplicity or to meet one of your accepted policies)
• Contributions from your employee’s after-tax income.

If you make additional contributions under a collective agreement or industrial award and they are not specifically negotiated or influenced by your employee, the extra contributions are not reportable.

Examples of reportable and non-reportable super contributions

How to report super contributions for your employees

RESC is generally recorded through single touch payroll (STP). If your employee has salary-sacrificed amounts from their qualifying earnings for SG purposes, you must report this through STP.

By 14 July each year, you need to complete an end-of-year STP finalisation detailing all the super and tax information you have reported to the ATO. Under the STP rules, this finalisation means you are exempt from the requirement to provide your employees with annual payment summaries and to lodge a payment summary annual report. (Your employees can now access online the information formerly available on their payment summaries via the ATO using their myGov login.)

When STP reporting is not compulsory and you choose not to report the extra super contribution amounts through STP, you are required to give payment summaries to your employees and submit a payment summary annual report to the ATO.

RESC must be reported for the income year (1 July to 30 June) in which they were accrued, not the financial year in which they were paid. This can be different from the year in which they are received by the super fund.

Recordkeeping for RESC: What to record and how long to keep it

The ATO requires you to keep records of whether your employees influenced the super contributions you made on their behalf. To meet this requirement, you will need to keep records of:

• How you calculated reportable employer super contributions
• How you calculated the employee-influenced portion of the total employer contribution
• How you calculated your employee’s SG on qualifying earnings
• Relevant salary-sacrifice agreements
• Relevant industrial agreements.

You must keep your records for five years after they are prepared, obtained or the transactions are completed – whichever occurs last. The records must be in English or in a form the ATO can access and understand.