Changes to Salary Sacrificed Super Contributions – Are you prepared?

Effective from 1 January 2020, new legislation has been introduced which means that salary sacrificed superannuation contributions cannot be used to reduce an employer’s mandated superannuation guarantee (SG) obligations. If you previously excluded salary sacrificed superannuation contributions from your SG calculations, you will need to review your position prior to paying your March quarter contributions (due by 28 April) to ensure your business is compliant.

What’s changed?

The minimum amount of SG you are required to pay for your employees is now based on a new concept known as their ordinary time earnings (OTE) ‘base’.


The ‘base’ is the sum of;

  • The employee’s OTE
  • Any salary sacrificed OTE amounts


Previously, salary sacrificed amounts were not considered to be OTE and as such super guarantee was not payable on these amounts. This new legislation requires employers to pay SG on salary sacrificed OTE amounts.


What’s the cost to employers?

The new legislation may result in additional costs to employers. Below is a comparison of calculations based on an employee with a salary package of $100,000 (ex super):


Prior to

1 Jan 2020


Salary package (ex super )



Less wages



SG @9.5% on wages



Balance of package



Salary sacrificed super to be reported as reportable super via STP or on the PAYG summary



SG @9.5% on salary sacrifice super



Total concessional super to be paid into the employee's superfund



Total cost to employer




It’s worth noting, to date this legislation applies only to amounts of salary sacrificed super and no other salary sacrificed fringe benefits.


Need help?

For more information on the changes or for assistance to calculate your SG obligations prior to the 28 April deadline, please contact your usual Mazars advisor or alternatively our specialists:

Brisbane – Clive Todd

Melbourne – Liliana Harris

Sydney – Jeremy Mortlock

+61 7 3218 3900

+61 3 9252 0800

+61 2 9922 1166


Author: Liliana Harris

Published: 17/3/2020


Please note that this publication is intended to provide a general summary and should not be relied upon as a substitute for personal advice.

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