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Posted: 19 Jun 2008
Some Real Estate employers face significant changes in relation to their superannuation obligations as from 1 July 2008 and should consider immediately preparing their accounts staff and salespersons for the changes.
Pre 1991 Super Funds
Certain Real Estate employers who contributed to a complying fund set up before 21 August 1991 have calculated the superannuation levy in relation to their salespeople, on the salesperson's retainer as opposed to ordinary time earnings.
As from 1 July 2008 the salesperson's ordinary time earnings will be the base for calculating superannuation up to a maximum contribution base. For the tax year 2007-2008 an employee's maximum contribution base per quarter is $36,470. This means that if the salesperson's earnings exceed this amount in any one quarter then superannuation is not payable on the excess.
Ordinary time earnings are set out on the Australian Taxation Office website and include:
• Allowances (other than a reimbursement of expenses or expense allowance)
• Bonuses (which relate to specific performance criteria) and Commissions
• Paid leave
Refer www.ato.gov.au and follow the prompts to "Superannuation guarantee a guide for employers" for further information and also for the 2008/09 maximum contribution base figures.
Advise employees of the changes
It would be prudent for Real Estate employers to advise their employees in advance of the change taking place as most employees will end up with a smaller amount of net payment after deduction of the superannuation guarantee levy on their gross ordinary time earnings base.
Potential increase in the superannuation levy
There has been some discussion about an increase in the superannuation guarantee levy from 9% to some higher amount to be fixed under the Rudd Government.
Revise employer obligations
All employers should also give consideration to the wording of any obligation to pay superannuation in their contracts of employment or letters of offer of employment so as to ensure that they, the employer, do not find themselves funding any increase in the superannuation guarantee levy.
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