Guest bobbyrobson Posted February 8, 2008 Share Posted February 8, 2008 Hi Poms, I've just looked into my super payments for the last 3.5 years whilst on a 457. It's opened a veritable can of worms and I'm hoping that this forum can help! My employer super contributions have been paid at 9% of my post lafa salary. I'm trying to find out if this is correct. As an illustration lets say I'm on $60k gross. 9% of that is $5.4k. My employer has reduced my salary to $40k, to adjust the tax, due to my lafa allowance. So the Super contributions have been 9% of $40k or $3.6k. Quite a difference! The only other salient info is that my contract states my salary (gross before Lafa) plus my super contribution of 9% on the gross figure. Can anybody clarify what the "go" is on this? Should they be paying gross or post lafa net? Any pointers if and where I can find the legislation. Cheers in advance for any help you can provide, Bobby! Link to comment Share on other sites More sharing options...
Guest Mrs Braveheart Posted February 8, 2008 Share Posted February 8, 2008 hi , other half says he thinks its is gross but hes not 100% Link to comment Share on other sites More sharing options...
Guest Liam Posted February 10, 2008 Share Posted February 10, 2008 Here is my general advice on this question but I would suggest you contact someone like Alan Collett on this site for a proper answer from a qualified tax consultant. Better to pay for professional advice once you know they savings will outweigh them! Anyway in theory at least, every wage earner should receive an employer-funded super benefit (SGC) of not less than those 9% of their annual salaries. But, as the legislation is drafted, the employer's statutory obligation is expressed as a percentage of the salary actually paid to the employee. Those on a 457 who can arrange a LAFHA are therefore at risk of losing some of the SGC (Super Guarantee Contribution 9%). Now not all company payroll officers even notice that they have reduced your Super as the payroll software works out the 9% on the Taxabale Salary column. So my advice is to ask them first if they knew this was happening and if they didn't I am sure they may reimburse you. But by law they do not have to as they are following the legislation. With the use of salary packaging by employers, many employees are substituting fringe benefits, including novated car leases and salary sacrifice super contributions, for taxable salary. This reduces their salary and the accompanying compulsory minimum employer super contribution. I tell all my clients to make sure they agree with the employer (& payroll officer) that Super is 9% of Gross Salary before Salary Sacrifice etc. Under the legislation as now drafted, employees opting for salary sacrifice arrangements run the risk of losing out on their employer super contributions. You need to reach agreement with the employer about the precise composition of any salary packaging arrangements. hope this explains this trap. Liam Link to comment Share on other sites More sharing options...
Guest Edinburger Posted February 10, 2008 Share Posted February 10, 2008 The way is was expalined to me is simply that you don't get Super paid on the tax free part of your salary as that would be a double benefit. Can't have your cake and eat it essentially. So you lose out a little on the Super but what you gain from the Lafha should more than cover the difference. Link to comment Share on other sites More sharing options...
Guest dave&donna Posted February 16, 2008 Share Posted February 16, 2008 ok non mathematical person entering the room so EXTRA SUPPORT NEEDED PLEASE - hey I teach 5 years old and my limit is knowing which number is bigger 10 or 2 ....... Oh has been offered a job and have said they pay super contributions but can't remember how much think it was 6 or 7%?? Nobody has mentioned lafha to him but not sure whether it is worth us mentioning it to them - is it going to put more money in his pay packet each fortnight or in the long run will he get more money from super annuation contribution??? Am i right in thinking super annuation is extra pension payments or am i completely on the wrong track? Any help would be much appreciated but the simpler the better please - I don't understand japanese or any of that technical speak :wacko: Many thanks Donna :wubclub: Link to comment Share on other sites More sharing options...
Guest Liam Posted February 18, 2008 Share Posted February 18, 2008 ok non mathematical person entering the room so EXTRA SUPPORT NEEDED PLEASE - hey I teach 5 years old and my limit is knowing which number is bigger 10 or 2 ....... Oh has been offered a job and have said they pay super contributions but can't remember how much think it was 6 or 7%?? Nobody has mentioned lafha to him but not sure whether it is worth us mentioning it to them - is it going to put more money in his pay packet each fortnight or in the long run will he get more money from super annuation contribution??? Am i right in thinking super annuation is extra pension payments or am i completely on the wrong track? quote] Donna The Superannuation Guarantee Contribution (SGC) is set at 9% and this is as you say a Payment into a long term pension fund. I think u should talk to an accountant with experience in Australia to see if the LAFHA would be appropriate to claim in your circumstances as it all depends on your visa, the employer agreeing to participate, the level of salary and any packaged items in that salary package. Defintely worth spending a few hundred getting the right answer for u! Try Collett & Co best of luck Liam Link to comment Share on other sites More sharing options...
northernbird Posted February 18, 2008 Share Posted February 18, 2008 You don't claim LAFHA you are offered it. It is part of the Fringe Benefits Tax and not all employers offer it. It is not a given right to temporary visa holders. Link to comment Share on other sites More sharing options...
Guest bobbyrobson Posted February 19, 2008 Share Posted February 19, 2008 Hey, Thanks everyone for posting reply's. Much appreciated. Cheers, Bobby. Link to comment Share on other sites More sharing options...
Guest dave&donna Posted February 19, 2008 Share Posted February 19, 2008 Thanks very much Liam I understood every word :err: well almost!!!! It's a lot clearer now. Donna x Link to comment Share on other sites More sharing options...
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