What mistakes the Tax Office focuses on

Excess Contributions over $25,000 and $50,000 – being made to your super above the tax office set limits (caps). Sometimes you may work for more than one employer during a year or may work for two employers at the same time which is common for doctors and engineers for example.

Example: Tom the doctor, a 47 year old works for two hospitals each pays him $150,000 during the years and so the SG support at 9% employers obligations is $13,500 each. However Tom the doctor’s Superfund(s) received more than the Tax office limit (cap) of $25,000 and so he is penalized by paying not only the 15% contributions tax but also a Excess Contributions tax of 31.5% on the excess contributed of $2,000. In this situation Tom or the employer have no choice to opt out of the SGC, simply the Excess contributions tax must be paid!

Salary Sacrifice Tax Warning – If you salary sacrifice then your superannuation payable by your employer could also reduce so be certain that your overall remuneration package is not being reduced when thinking by salary sacrificing you will be better off. The reason your employer super payment (SGC) could drop is because super is normally calculated on the cash salary paid to you, after deducting salary packaged items.