Salary Sacrifice - Check required

[carmo]

Hi just wondering if someone can go over my chart and see if I have my facts right. "effective" being an arrangement with employer to continue paying 9% of the gross pay and "ineffective" where the employer does not.

"effective " "do nothing" "ineffective"
Gross pay $1,000.00 $1,000.00 $1,000.00
Employee payment $100.00 $- $100.00
New gross pay $900.00 $1,000.00 $900.00
Employer obligation $90.00 $90.00 $-

Income tax $190.38 $220.38 $190.38
Super tax $15.00 $- $15.00


Net pay $709.62 $779.62 $709.62

Total $175.00 $90.00 $85.00
super payments

Annual total $9,100.00 $4,680.00 $4,420.00
super payments


Annual difference $4,680.00

 

[carmo]

Sorry it did not come out as a chart.

 

[carmo]

Take two

"Effective arrangement" "Do nothing" "Ineffective arrangement"
Gross pay $ 1,000.00 $ 1,000.00 $ 1,000.00
Employee additional super payment $ 100.00 $ - $ 100.00
New gross pay $ 900.00 $ 1,000.00 $ 900.00
Employer super obligation (9%) $ 90.00 $ 90.00 $ -

Income tax $ 190.38 $ 220.38 $ 190.38
Tax on super payments $ 15.00 $ - $ 15.00


Net pay $ 709.62 $ 779.62 $ 709.62

Total super payments $ 175.00 $ 90.00 $ 85.00

Annual total super payments $ 9,100.00 $ 4,680.00 $ 4,420.00

Annual difference $ 4,680.00

 

[carmo]

No just forget it.

 

[Smurf1976]

Don't panic. I can still follow it even if it didn't come out quite as intended.

 

[dubiousinfo]

Carmo
Given that the 9% employer contribution is compulsory, I am assuming that you are contemplating putting in place an arrangement where you would become a contractor rather than an employee and you are attempting to calculate the extra amount the employer would need to pay you to compensate for the 9% super he would no longer be required to pay.

Is this correct?

 

[carmo]

This is the problem, it appears that unless you have an agreement with your employer, your salary sacrifice, in this case $100 a week, is deemed to be the employer's contribution, fulfilling their SG requirement.