Courtesy of Australian Payroll Association
Pay Day Super Reforms: Draft Legislation Unveiled
On 14th March the draft legislation for the pay day super reforms was released. A summary of some of the key components of the legislation can be found below.
With a federal election now called for the 5th May, the government is in caretaker mode. This means that consultation is paused until after the election. However, interested parties still have until Friday 11th April to file submissions in response to the draft legislation. You can find the draft legislation, supporting documents, and details on how to file a submission here.
Summary of Key Payday super provisions
QUALIFYING EARNINGS – new terminology has been introduced, called Qualifying Earnings (QE). QE are the earnings on which employers are required to make an SG contribution. Note that this has not changed the amount of super that is required to be paid, the definition of Ordinary Time Earnings (OTE) will remain the same.
QUALIFYING EARNINGS DAY (QE Day) = Pay day
Payday is defined as the date an employer makes a payment of qualifying earnings to an employee
KEY POINTS
MAXIMUM SUPER CONTRIBUTION BASE (MSCB)
The MSCB will be changed from a quarterly base to an annual base. The formula for the MSCB will be:
Concessional Contribution Cap x (100 / SG percentage)
Therefore, if the concessional contribution cap was $30,000, and the SG percentage was 12%, then:
$30,000 x (100 / 12) = $250,000 MSCB per annum. Super would not be required to be paid on excess earnings once an employee has earned $250,000 with that employer.
OVERPAYMENTS
EXTENSIONS
SG CHARGE
COMPONENTS OF THE SG CHARGE
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https://www.austpayroll.com.au/pay-day-super-reforms-draft-legislation-released-and-key-provisions/