How is superannuation paid?

Discussion in 'Accounting & Tax' started by Jmillar, 2nd Sep, 2017.

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  1. Jmillar

    Jmillar Well-Known Member

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    Hi guys,

    I earn a base salary (let's call it $50k) plus commission (let's call it $100k). Does my employer have to pay the current rate (I think it's 9.5%) on my total gross earnings (ie $150k in this example)? It doesn't get adjusted at tax time based on all my deductions, does it?

    Is there any way I can reduce the amount of super I am receiving so I get a higher amount paid in my pocket?

    Cheers
     
  2. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    An accountant will know but I don't think commissions count for employer compulsory super Payments.
    .it is not based on taxable income but employment base income.

    No way to reduce it other to earn less.
     
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  3. Jmillar

    Jmillar Well-Known Member

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    Thanks Terry - hopefully commissions don't count and I can reduce the amount of super I pay significantly!

    Any Accountants here able to confirm?

    Cheers
     
  4. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    love the last line

    many people actually do exactly that
    ta

    rolf
     
  5. Trainee

    Trainee Well-Known Member

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  6. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    It doesn't actually say that, but will depend on the nature of the commission.
     
  7. datto

    datto Well-Known Member

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    If you are at preservation age or over 60 speak to a qualified expert about Transition to Retirement Supplementing Salary and salary sacrifice. Earn more, pay less tax. See da man for more info.
     
  8. sanj

    sanj Well-Known Member Premium Member

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    If it's deemed that super is not payable on your commission payments that doesn't mean you will get the money your employer "saved", your earnings will stay the same at100k in commissions, you just may find d your employer putting 9.5k into your super or not, either way there is zero benefit in wanting for it not to be paid to you as there is no gain elsewhere
     
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  9. kierank

    kierank Well-Known Member

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    Why?
     
  10. big_ben02

    big_ben02 Well-Known Member

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  11. Jmillar

    Jmillar Well-Known Member

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    I'm 25yo. I'd rather invest the funds myself than have someone else playing around with it for another 35 years.

    Accessing super when I'm of age will be a bit of a bonus, I'm not relying on it like many people have to. I'm on track to retire far before I turn 60.
     
  12. Jmillar

    Jmillar Well-Known Member

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    My commission is paid based on exceeding sales targets.

    Seems like it's not a black and white answer. I'll call my accountant to clarify.

    Thanks everyone
     
  13. HUGH72

    HUGH72 Well-Known Member

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    Your employment agreement will have the answer. I would definitely prefer to have employer super contributions on the commission income as well.
     
  14. kierank

    kierank Well-Known Member

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    Have you looked at setting up your own SMSF?
     
  15. bumskins

    bumskins Well-Known Member

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    Probably not a good idea in this case.
     
  16. Jmillar

    Jmillar Well-Known Member

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    Not yet, I have sub $100k in it and my time is better spent doing other things.

    Also, my understanding is those funds aren't accessible until I'm 60yo. (I could be wrong?)

    If I use those funds for the projects I'm currently doing, the ROI will be significantly higher.
     
  17. sanj

    sanj Well-Known Member Premium Member

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    Super is meant to provide for you in your retirement,not to help take risks in your 20s
     
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  18. Scott No Mates

    Scott No Mates Well-Known Member

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    You are 25 and have close to $100k in super - keep it going. By age 30 you'll be able to get some CIP under your belt in super.
     
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  19. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    Superannuation Guarantee Contributions are usually payable on performance based incentive payments. This is particularly the case where a base is paid and a incentive amount based on sales etc occurs. A good example is real estate agents. It can be impossible to determine a incentive is in respect of overtime if overtime isnt paid or records kept. Hence SGC will apply.

    If the employer argues the bonus doesnt attract super I would check why.....They may be attempting to reduce entitlements.
     
  20. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    I see a lot of 50 year olds who have next to nil in super who said that for the last 25 years and then lost it somehow. The key issue is you may want involvement in how the super is invested and managed while it is preserved.
     
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