New Super Guarantee Exemptions Available from 2020

From 2020, high-income earners with multiple employers can apply to opt out of receiving superannuation guarantee (SG) payments from some of their employers, to avoid unintentionally exceeding the concessional contributions cap for the financial year.

To opt out, the Australian Taxation Office (ATO) is advising individuals who think they could be exempt, to submit the ‘SG Opt Out For High-Income Earners with Multiple Employers’ form for review. If approved by the ATO, this allowing them to apply for an SG Employer Shortfall Exemption Certificate.

This certificate will release one or more of your employers from their SG obligations for up to four quarters in one financial year, noting that you will need to continue to receive SG contributions from at least one employer in each quarter of the financial year.

This process is due to commence on 1 January 2020, giving individuals time to submit forms and make your applications for the remainder of the 2020 financial year.

The ATO has requested the ‘SG Opt Out For High-Income Earners with Multiple Employers’ form be lodged before 18 November 2019, to assess exemption requests that will take effect in the third quarter of 2020, commencing 1 January 2020. For exemptions impacting the fourth quarter (commencing 1 April 2020), forms must be lodged by 31 January 2020.

According to the ATO, the exemption certificate means an exempt employer will not be liable for the super guarantee charge if they don’t make SG contributions on your behalf for the quarters covered by the certificate.

If you are a high-income earner considering an exemption for some of your employers, it is important to raise this with the employer(s) before applying as they may choose to disregard an exemption certificate and continue to make SG contributions on your behalf.

If you believe this may be useful for you, it is also important to consider your employment arrangements, such as how pay or other entitlements may change and the effect of a relevant award or workplace agreement applicable to you.

If you have any questions or need advice and clarity specific to your business, feel free to contact Semmens & Co on 03 8320 0320 for a free consultation.

Thoughts From Our Principals

Mark Semmens

Mark is a Chartered Accountant with a wealth of experience in accounting and taxation. Mark is a Member of Chartered Accountants Australia and New Zealand, the Tax Practitioners Board and the National Tax and Accountants Association.

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Daniela Semmens

Daniela Semmens is a Co-Director of Semmens & Co. and joined the company as General Manager in 2017. Daniela is an Affiliate Member of Chartered Accountants Australia and New Zealand and also a Member of the Australian Institute of Project Management.

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