The ATO, on Fri 17.4.2015, issued ATO ID 2015/9 (Superannuation Guarantee Scheme: attributed personal services income). The ID deals with the following question:
Does attributed personal services income attract superannuation guarantee (SG) obligations on the part of the relevant personal services entity?
The ID says no, except for actual salary or wages that are paid in the year of income but which are reported as attributed personal services income because they were paid more than 14 days after the end of the PAYG payment period in which the relevant amount was derived as income of the personal services entity.
[LTN 72, 17/4/15]
ATO ID 2015/9 – extract
“A personal services entity is a company, partnership or trust whose income includes the PSI of one or more individuals.
“In certain circumstances, under section 86-15 of the ITAA 1997, an amount of income derived by a personal services entity from the personal services (principal work) provided by an individual may be included in the assessable income of the individual. These amounts (referred to as attributed amounts) are excluded from the assessable income and exempt income of the personal services entity under section 86-30 of the ITAA 1997.
“Attributed amounts [normally excluded from the entity’s assessable income under s86-30] do not include personal services income paid promptly by the personal services entity to the individual, as an employee, as salary or wages. T[o be ‘prompt’ the salary] payment must be made before the end of the 14th day after the relevant PAYG payment period [that is the period in which the entity derived the personal services income]. These [‘prompt’] payments are deductible to the personal services entity and therefore reduce the amount that would otherwise be attributable personal services income (due to the operation of subsection 86-15(4) of the ITAA 1997).
“However, the treatment of salary or wages that are paid to the personal services provider more than 14 days after the end of a PAYG payment period in which the amount became ordinary or statutory income of the personal services entity is different. These amounts are not included as salary or wages on a personal services provider’s tax return, but are instead reported as attributed personal services income.” [But because these amounts were paid as actual salary (albeit not ‘promptly’ there is still SGC payable by the entity.]