Superannuation Guarantee Opt Out for High Income Earners.

New legislation has recently been passed which means that from 1 January 2020, employees on high incomes who receive wages from multiple employers will now be able to opt out from Superannuation Guarantee from at least one of their Employers.

Employees will now no longer unintentionally breach the $25,000 concessional contributions cap as a result of receiving Superannuation Guarantee on multiple income sources.

This will come as a welcome relief for employees who have previously been unable to avoid breaching their contributions cap, resulting in additional tax following lodgement of their tax returns each year.

To be eligible to opt out, an employee must:

  • Have more than one employer, and
  • Expect your combined employer’s mandated concessional superannuation contributions will exceed your concessional contribution cap in a financial year ($25,000).

Employees must still receive Superannuation Guarantee from at least one of their employers in each quarter covered by the exemption certificate.

How to apply

An exemption certificate is required before an employer can cease paying Superannuation Guarantee. To obtain this, an employee must complete and submit the SG opt out for high income earners with multiple employers form.

The form must be lodged at least 60 days before the first day of the first quarter that the application relates to.

The certificate will release one of more of your employers from their SG obligations for up to four quarters in one financial year. The certificate means your employer will not be liable for the super guarantee charge (SGC) if they don’t make SG contributions on your behalf for the quarters covered by the certificate.

A separate application is required for each financial year.

Once issued, the exemption certificate cannot be varied or revoked. It is therefore important to speak to your employer prior to applying for the certificate about any effect an exemption certificate may have on your pay or other entitlements. For example, ensuring that any forgone superannuation guarantee would be paid as salary & wages by your employer instead.

The certificate is not binding on your employer and they can choose to disregard an exemption certificate and continue making SG Contributions.

The next quarter you are able to claim an exemption for is from 1 April 2020 to 30 June 2020 and this form must be lodged by 31 January 2020.

Please contact our office if you are receiving wages from multiple employers and believe this opt out may be of benefit to you to avoid you exceeding your concessional contributions cap.

The information on this website and the links provided are for general information only and should not be taken as constituting professional advice from Hall Browns Accountants. You should consider seeking the appropriate legal, financial, or taxation advice to check how the website information relates to your unique circumstances.

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