What are Reportable Employer Superannuation Contributions?
Reportable Employer Superannuation Contributions (RESC) include contributions made by an employer that exceed mandated levels and which the employee can influence. RESC generally includes salary sacrifice superannuation and other voluntary employer contributions including those made to Constitutionally Protected Funds.
However, contributions to superannuation that are required by an industrial instrument or rules of a superannuation fund are excluded from the RESC definition to the extent that the member has no capacity to influence the requirement to make the contribution or the size of the contribution.
What relevance does RESC play?
RESC is included in the income test for certain government benefits, concessions and obligations, including:
- Spouse contribution tax offset
- Government co-contribution
- Low income superannuation tax offset
- Medicare Levy Surcharge1
- Private health insurance rebate1
- Seniors and pensioners tax offset1
- Family tax benefits1
- Child care subsidy1
- Child support1
- Higher Education Loan Program (HELP) repayments1
- Parental Leave Pay1
- Commonwealth Seniors Health Card1
For more information in relation to the income tests for these benefits, concessions and obligations please refer to Macquarie's Big Black Book.
Notification of RESC
Employers are required to notify both their employees and the ATO of the RESC payments made during a financial year.
Employees are notified of the amount of RESC via the annual PAYG payment summary which is generally provided in July each year for the previous income year.
Timing of contribution reporting
RESC are reported for the income year to which the contribution relates. This may be different from the financial year in which they are received by the super fund.
By contrast, for contribution cap reporting, superannuation funds report the contributions for the income year in which they are received.
This difference in timing is illustrated in the example below.
Martin has a salary sacrifice arrangement with his employer to contribute up to the full concessional contributions (CC) cap of $25,000 in the 2019/20 financial year.
His employer typically makes the contributions after the end of each quarter when superannuation guarantee contributions are due. This means that one of the salary sacrifice contributions will not be paid until July 2020.
Martin’s employer will include the July contribution in its RESC reporting for 2019/20 as the contribution relates to this financial year.
However, the July contribution will count towards Martin’s CC cap in the 2020/21 year.
For contribution cap questions refer to Macquarie’s Contribution Cap Companion.