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ATO provides further details on SG exemption measure
Following the government’s budget announcement that it will allow high-income earners to exclude wages from certain employers from SG, the ATO has provided information on the application process for this.
Under this new budget measure, the ATO said individuals with more than one employer who expect their income for SG purposes will exceed $263,157 for the financial year will be able to apply for an exemption certificate to release some of their employers from their SG obligations.
From 1 July 2018, the ATO said eligible individuals will be able to download an application form from the ATO website that will need to be completed and returned to the ATO for approval.
At this stage, the ATO said it is anticipated that individuals will need to submit their applications 60 days before the start of the quarter that the exemption will apply to.
“The application form will request all information required for the commissioner to make an assessment including which employers the exemption certificate will apply to and the quarter in the financial year to which it should apply,” it said.
“Exemption certificates may be issued for multiple quarters within a financial year and will not extend beyond the financial year in which they are issued.”
If approved, the ATO said the individual and their exempted employers will receive a copy of the exemption certificate directly from the ATO.
“By issuing an exemption certificate the commissioner will provide certainty for the employer as, once issued, the certificate cannot be varied or revoked,” it explained.
“Employers can choose to not comply with the exemption certificate. The take-up of this arrangement and any changes to remuneration would need to be negotiated between the employees and the employers.”
Miranda Brownlee
Miranda Brownlee is the deputy editor of SMSF Adviser, which is the leading source of news, strategy and educational content for professionals working in the SMSF sector.
Since joining the team in 2014, Miranda has been responsible for breaking some of the biggest superannuation stories in Australia, and has reported extensively on technical strategy and legislative updates.
Miranda also has broad business and financial services reporting experience, having written for titles including Investor Daily, ifa and Accountants Daily.
Im guessing what the issue is that if you have multiple jobs and they all pay super into the fund then it is likely you will go over the concessional contribution limit.0- I just realised the implications of this measure. If I have 3 jobs over the year, maybe at the same time or one after the other, if I reach that income level during the year, I can choose whether or not the employer has to pay SG which is an additional remuneration to salary. So that means one or more employers will get off cheaper by not having to pay the SG? How does the employee decide which employer to bless with the cost reduction? Or really, should the SG be left alone and anything over the cap is treated as it is now and taxed a bit extra to become non-concessional. Again "fixing" an issue with a more complicated solution.0
- I think you're missing the point...The reduction in SGC would be offset by an increase in wages, which would leave the employee in the exact same situation, albeit without having to complete voluntary release authority forms, have their ITR amended, etc, etc.0
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