Salary Sacrifice

(from the ATO's Business Implementation Guide)

The Treasury Laws Amendment (2019 Tax Integrity and Other Measures No. 1) Act 2019 changed the law to ensure that an individual’s Salary Sacrifice contributions cannot be used to reduce OTE or count towards a payers minimum superannuation guarantee contributions.

This means that if Payees were formerly not included in the report, as 100% of their payments were sacrificed, including sacrifice to superannuation, those Payees must now be reported. For example; if a Payee had reportable payments of 50,000 and 30,000 was sacrificed to superannuation and 20,000 was sacrificed to other employee benefits, this Payee must now be reported.

The Salary Sacrifice must be reported as:

• Superannuation – an effective Salary Sacrifice arrangement, entered into before the work is performed, where contributions are paid to a complying fund, where the sacrificed salary is permanently foregone, or

• Other Employee Benefits – an effective Salary Sacrifice arrangement, entered into before the work is performed, for benefits other than for superannuation, where the sacrificed salary is permanently foregone (that is novated lease, gym membership etc).

Salary Sacrifice has been introduced as a discrete payment type (as a positive amount) that now requires all other payment types to be reported as the pre-sacrificed YTD amounts. This may require different approaches to reporting, depending on the salary packaging method used.

See ATO website for more information.