| Salary and other benefits, including salary packaged superannuation, any FBT component etc. | $100,00 |
| Compulsory superannuation (9.5% of pre-packaged salary) | $9,500 |
| Total remuneration package | $109,500 |
Some employers allow employees to reduce the compulsory superannuation component of their remuneration package when salary packaging. These employees are no worse off, as their total remuneration package value is maintained, but they have more flexibility regarding how much of their package is made up of superannuation. That is, compulsory superannuation is based on the salary component (as reduced after salary packaging) and the employee has the option to salary package a further amount of superannuation and/or other benefits, as they wish.
For example, the same $109,500 total remuneration package, might be structured as follows:
| Salary | $80,000 |
| Compulsory superannuation (9.5% of salary) | $7,600 |
| Salary packaged superannuation | $1,000 |
| Other benefits, including any FBT component etc. | $20,900 |
| Total remuneration package | $109,500 |
The proposed changes will remove this option, to the extent that compulsory superannuation must be applied to the salary and salary packaged superannuation components. So the above remuneration package could be changed as follows in order to comply with the proposed new rules:
| Salary | $79,913 |
| Salary packaged superannuation | $1,000 |
| Compulsory superannuation (9.5% of salary) | $7,687 |
| Other benefits, including any FBT component etc. | $20,900 |
| Total remuneration package | $109,500 |
The type of arrangements towards which the proposed changes are actually targeted, are where the employer pays superannuation on the reduced salary component only and does not maintain the total remuneration package value, and where the employer treats salary packaged superannuation as helping to meet its superannuation guarantee obligation.
So for example, the package referred to above, might have been set at $100,000 salary plus superannuation. This would equate to a total package of $109,500 if the employee did not salary package any benefit. With salary packaging, the total package might be reduced, as follows:
| Salary | $80,000 |
| Other benefits, including any FBT component etc. | $20,000 |
| Compulsory superannuation (9.5% of salary) | $7,600 |
| Total remuneration package | $107,600 |
Further, if the employee had salary packaged some superannuation, an unscrupulous employer might have used this to reduce the compulsory contribution amount, as follows:
| Salary | $80,000 |
| Salary packaged superannuation | $1,000 |
| Other benefits, including any FBT component etc. | $19,000 |
| Compulsory superannuation (9.5% of salary) | $6,600 |
| Total remuneration package | $106,600 |
The proposed changes will fix the second problem, but will not fix the first problem in its entirety. The first problem is only addressed to the extent the employee has salary packaged additional superannuation. Salary packaging of other types of benefits is not taken into account.
The proposed changes will require any salary packaged superannuation to be identified and compulsory superannuation to be paid on this amount. For instance, the total package might look like the following:
| Salary | $80,000 |
| Salary packaged superannuation | $1,000 |
| Compulsory superannuation (9.5% of salary) | $7,695 |
| Other benefits, including any FBT component etc. | $19,000 |
| Total remuneration package | $107,695 |
