All before-tax payments (which include an employee's salary sacrifice contributions and employer contributions) are taxed at 15% when they’re paid into a super account. You will need to increase any before-tax standard member contributions to a Defined Benefit account you pay on your employee's behalf to pay the contributions tax and make sure your employee continues to accrue the same multiple.
The table below shows the adjusted salary sacrifice contribution rates that you’ll need to pay for Defined Benefit accounts to keep the employee's standard member contribution rate.
|Standard (after-tax) contribution
||Adjusted salary sacrifice contribution
How much you need to pay on top of what your employee pays should be the greater of these two calculations:
- 10.5% of the employee’s ordinary time earnings (OTE).1
Your employee's fortnightly OTE is $2,800. The payment you’re required to make, based on OTE for the period, is: 0.105 x $2800 = $294.
- 7.75% of (employee's standard member contribution divided by their standard member contribution percentage) plus 85% of employee's standard member contribution.
Your employee earns a fortnightly base superannuation salary of $2,000 (excluding non-approved allowances and bonuses). If your employee pays 5.88% standard member contribution for the period, amounting to $117.60, you’re required to pay: 0.0775 x ($117.60 / 0.0588) + (0.85 x $117.60) = $254.96.
Of these two examples, the first OTE calculation result is greater so your employer obligation to super for this employee would be $294.
If your employee is paying their contribution before tax, your employer contribution can also be calculated by using this equation:
(Standard member contribution ÷ standard member contribution rate) x 7.75% + (standard member contribution x 85%).
Some employers will have employment arrangements that govern the contribution arrangements that differ from these standard arrangements.
If you’re unsure how much you should be paying or need help calculating payments, please contact the Employer Solutions and Support team.