Employer super contributions and FBT updates

News

Employer super contributions and FBT updates

Reportable employer superannuation contributions; FBT car parking threshold from 1 April 2011.

WantToReadMore

Get unlimited access to all of our content.

Reportable employer superannuation contributions; FBT car parking threshold from 1 April 2011.

Reportable employer superannuation contributions

Legislation to change the definition of reportable employer superannuation contributions has been introduced.

The Government flagged its intention last year to exclude from the definition certain employer contributions to superannuation made for the benefit of an employee where the amount of additional contribution is unable to be influenced by the employee (eg those prescribed by an ‘industrial instrument’ or by the rules of a superannuation fund).

The legislation will apply retrospectively from the 2009–10 income year.

What are reportable employer superannuation contributions?
 
Reportable employer superannuation contributions (RESCs) are contributions made to an individual’s superannuation by an employer that are above the 9% Superannuation Guarantee charge rate, and where it is possible for that individual’s assessable income to be reduced as a result. Salary sacrifice arrangements are the major type of RESC, but some other contributions may also fall under this definition.
 
The major influence of RESCs is on determining an individual’s income and therefore his or her eligibility for a range of means-tested government assistance programs.

Comparison of key features of new law and current law
 
The Explanatory Memorandum to the new legislation summarises the key differences between the old and the new law:
New law

Contributions to superannuation that are required by an “industrial instrument” or rules of a superannuation fund are expressly excluded from the reportable employer superannuation contributions definition to the extent that there is no capacity to influence the content of the requirement to make the contribution or its size.

Current law

Additional employer contributions to superannuation that are required by an “industrial instrument” or the rules of a superannuation fund, the amount of which can be influenced due to an action or inaction taken by the employee, are included in the reportable employer superannuation contributions definition.’
More details
 
See: Tax Laws Amendment (2011 Measures No. 4) Bill 2011 (pdf)

See also: the Explanatory Memorandum (pdf), which includes a number of examples of the situations to which the new legislation will/will not apply.


FBT car parking threshold from 1 April 2011
 
The car parking threshold for the fringe benefits tax (FBT) year, which commenced on 1 April 2011, is now $7.71 (previously $7.46).
 
The threshold applies to car parking facilities provided by an employer to an employee and whether it will be subject to FBT (Taxation Determination TD 2011/14).
 
The ruling is available on the Australian Tax Office website.
 
Post details