The implications for employees and employers will depend on the employer’s current policies.

Effective 1 July 2018:

  • superannuation guarantee is proposed to be payable on the value of salary packaged superannuation, as well as cash salary; and
  • salary packaged superannuation cannot be applied to help meet the employer’s compulsory superannuation guarantee obligation.

Prior to then:

  • only the salary component of remuneration is subject to superannuation guarantee; and
  • salary packaged superannuation is lumped together with other employer superannuation contributions when testing whether the superannuation guarantee obligations have been met.

1. Superannuation based on pre-packaged salary

Most employers that offer salary packaging, currently pay superannuation on the “pre-packaged” salary amount, ie. prior to the deductions for salary packaged items. This treatment, therefore, means that compulsory superannuation is based on an amount inclusive of salary packaged superannuation, so for these employers, the changes will have no impact.

For example, assume a total remuneration package of $109,500 including superannuation. The employer’s current policy will be consistent with the legal requirement after 1 July 2018 and will include superannuation in the remuneration package as follows: