Many Australians receiving the government’s $1,500 wage subsidy, JobKeeper, may find that, come September, their nest egg is around $1,710 lighter than expected.
That’s because employers are not actually required to contribute the 9.5 per cent super guarantee to their employee’s super fund if the employee isn’t genuinely working.
According to the Australian Taxation Office (ATO), the employer is not required to contribute any superannuation on any amount of JobKeeper the employee receives in addition to their genuine pay.
And, not receiving the 9.5 per cent super contribution from your employer for six months’ worth of JobKeeper would mean losing $1,710 from your nest egg over the course of this period.
What’s the deal with JobKeeper and superannuation?
If you are working 0 hours in the fortnight you receive $1,500 via JobKeeper, then your employer is entitled to put nothing towards your super fund.
However, if you are genuinely working throughout the fortnight, then your employer is required to pay some superannuation.
For example, if you are working 10 hours throughout the fortnight at $20 per hour, and receiving JobKeeper, then your employer will be required to pay the superannuation guarantee on $200 of the $1,500 you receive.
“In some cases, the $1,500 the employer pays will be more than the amount it is required to pay its employee solely in relation to the performance of their work and any paid leave they take for that fortnight,” the ATO states.
“For the purposes of calculations made under the super guarantee (SG) legislation, this additional amount is excluded from being salary and wages and is not included as part of the employee's ordinary time earnings.
“For SG purposes the employer does not need to make any super contributions in respect of that additional amount in order to avoid a super guarantee charge (SGC) liability – though the employer can choose to do so.”
What can I do about it?
If you’re worried about the size of your nest egg, Helen Baker, financial adviser and spokesperson for Money.com.au, told Yahoo Finance Aussies can self contribute the 9.5 per cent if they really wanted to.
But there is a catch with that: “It means your money is locked away,” Baker said.
“So if you’re struggling financially and you want to see how the next wave goes, then you might want to hold off because we are only at the start of the new financial year - we have the rest of it to go.”
However, if you get back on your feet and feel you can afford to, then you can certainly top up your nest egg down the track.
“And if you do contribute - make sure you claim it as a tax deduction at the end of the financial year,” Baker said.
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