This Commissioner’s Practice Note will assist employers in determining their liability for payroll tax on superannuation contributions and the Commonwealth superannuation guarantee charge (SGC”). It explains the Chief Commissioner’s application of relevant provisions of the Payroll Tax Act 2007 (“The Act”) including Division 3 of Part 3 (“Superannuation contributions”), and superannuation benefits paid or payable in respect of persons who are taken to be employees under a relevant contract or an employment agency contract, directors of companies and members of a board of management of an incorporated or unincorporated association.
Practice Note CPN 021 [LTN 187, 28/9/21]
Overview (CPN 021)
- Employer contributions to a superannuation fund for the benefit of an employee, or for a person deemed to be an employee – are “wages” for payroll tax purposes.
- Superannuation contributions for the benefit of a director of a company or a member of the board of management of an incorporated or unincorporated association – are “wages”.
- Superannuation contributions by an employer to a defined benefits fund – are “wages”.
- Employee contributions to a superannuation fund out of after-tax wages – are not “wages”.
- Superannuation contributions relating to underpaid wages – are payable for payroll tax purposes, when the wages are paid.
- Payments of SGC – are subject to payroll tax when a Superannuation Guarantee Statement is lodged with the Australian Taxation Office (ATO) or when the ATO reassesses an SGC.
- Additional payments by employers, to employees, as compensation, for late payment of wages or superannuation contributions (other than additional superannuation contributions) – are not “wages” for payroll tax purposes.
- Additional superannuation contributions, paid by an employer, as compensation for late payment of wages, or superannuation – are “wages” for payroll tax purposes.
[Tax Month – September 2021] 29.9.21