The upcoming switch to Payday Super could cause issues with some workers whose employers are transitioning from quarterly superannuation payments to a more frequent schedule.
In certain cases, some workers may receive 15 months’ worth of superannuation contributions in a single financial year, potentially pushing them above their $30,000 annual concessional contribution caps, which would subject workers to high tax penalties.
This is because under the current rules, employers can pay their workers’ superannuation up to 28 days after the end of a quarter, meaning the contributions could land in employee’s accounts during the next financial year.
The issue would mostly affect high-income earners, although those who contribute to their super via salary sacrificing may also be at risk for breaching the cap.
The Australian government says it’s aware of this potential snag, and steps are being taken to ensure taxpayers aren’t hit with a surprise excess tax bill. The office of Assistant Treasurer Daniel Mulino says they have plans to introduce amendments to ensure individuals would not be penalised for inadvertent breaches of the cap during this transitional year.
As Sybiz Visipay users prepare for the Payday Super transition, take time to evaluate how the changes to superannuation pay frequency may affect your employees, heading off potential difficulties. Our next Sybiz Masterclass Webinar, scheduled for Friday 13 March, will cover Sybiz Visipay functionality and a look at upcoming changes in STP2 reporting and Payday Super requirements.
To learn more about Payday Super and how it will impact Sybiz Visipay users, visit our Payday Super page.
