Superannuation Amendments for JobKeeper Payments

Welcome news has finally arrived for employers with confirmation that the proposed amendments to the superannuation guarantee rule in relation to JobKeeper top-up payments have been registered. This should now provide employers certainty on their superannuation guarantee obligations for the June quarter.

jobkeeperInitial information provided by Treasury in the Explanatory Statement (ES) accompanying the JobKeeper legislation advised that if the JobKeeper payments made to employees exceed their normal earnings, compulsory superannuation guarantee would not be required on the additional amount (ie the top-up amount).

With the year-end rapidly approaching, there had been increasing concern from employers that the required amendments would not have been made in time, which would have meant employers having to pay higher superannuation than may have been otherwise required.

Pleasingly, the amendments make it clear, that superannuation guarantee will only be required to be paid on the salary ordinarily due to the employee, and not on any excess paid due to JobKeeper. That said, employers can elect to pay superannuation on the higher amount if they choose.

For example, consider Michelle, who works part time for a retail store. Her ordinary earnings are $1,100 per fortnight before tax. Her employer qualified for JobKeeper, and continues to pay her usual earning of  $1,100 per fortnight before tax, plus the additional $400 top-up required to be paid under the JobKeeper rules. Her superannuation guarantee is now confirmed to only be required on her ordinary earnings of $1,100 rather than the full $1,500 inclusive of the $400 JobKeeper top-up amount.

The amendments have arrived just in time, giving employers the ability to make the correct contributions before 30 June 2020 as originally intended with the introduction of JobKeeper.


The confirmation also allows employees to plan ahead and understand how much of a personal contribution they may be eligible to make, if they wish to top up their superannuation contributions to their concessional cap before year end.


How can RSM help?

If you need assistance with Jobkeeper legislation, RSM Australia has specialists across the country ready to help.
For an initial conversation, please get in touch with your local RSM office.