Tax facts
Providing your employees' Tax File Numbers (TFNs) is very important. Your employees will not be able to make member voluntary contributions or may pay more tax if Sunsuper does not have their TFNs.
Taxation laws require you to pass on TFNs of employees to Sunsuper where the employee has quoted the TFN to you.
The TFN is generally required to be quoted to the superannuation fund when you next make a superannuation contribution for the employees who quoted their TFN to you.
However, if you receive an employee's TFN within 14 days of sending your contribution for the employee, then you have up to 14 days from receiving the TFN to pass it on to the fund.
Your TFN responsibilities are to:
- respect the privacy of employees who quote you their TFN
- accept TFNs from your employee , and
- pass them on when you next make a contribution to the employee's superannuation fund.
Employer contributions
Employers and the self-employed can claim a full deduction for all super contributions (including salary sacrifice contributions) provided the employee is under age 75. Contributions up to a cap of $50,000 will be taxed at 15%. Contributions above the cap will be taxed at 46.5% (includes Medicare levy of 1.5%). This cap will be indexed to AWOTE (Average Weekly Ordinary Time Earnings) and the actual increase will only occur in increments of $5,000. However during the years of 2007/2008 to until 30 June 2012, for people aged 50 and over, there is a transitional arrangement that allows contributions up to $100,000 per year.
Tax treatment of ETP components
An Eligible Termination Payment (ETP) is a payment, which is made to an employee upon retirement, resignation, retrenchment or disablement, which receives concessional tax treatment. This payment can also refer to lump sum benefits paid from super funds, pensions or ETP annuities. Employees will not be able to rollover any ETP's into their super fund. They must take it as a lump sum and pay tax. However, transitional rules apply to any ETP's that are paid out until 30 June 2012, only if they are specified in existing employment contracts at 9 May 2006.
For further information, visit the Australian Tax Office's website.
