It’s almost past that time of year when high income earners, with multiple employers, may like to consider their level of super guarantee contributions as they could well be heading towards an excess contribution scenario. This is more prevalent in certain professions. For example, doctors, employed by different hospitals, can find that they are breaching their concessional caps.

This can be avoided by applying for a superannuation guarantee (SG) employer shortfall exemption certificate to release some of their employers from their SG obligation. (Form NAT 75067) A separate application is required for each financial year. Next year’s form is being redesigned to cater for payday super and is due to be released soon.

Only employees can complete the form and only if they:

• have more than one employer, and
• expect their combined employers’ mandated concessional super contributions to exceed their concessional contributions cap for a financial year.

Super contributions must be received from at least one employer in any quarter covered by the exemption certificate.

The application must be lodged in the approved form at least 60 days before the first day of the first quarter that the application relates to. This means that only the last quarter of this financial year can be applied for now and this must be lodged by 31 January. That doesn’t leave much time – but does it really matter?

The exemption route may have negative implications for the employee’s overall remuneration and entitlements. Unless there is some compensating adjustment, it may be best to just receive the excess. Excess concessional contributions are included in the individual’s assessable income for the year of contribution and taxed at marginal rates less a 15% non-refundable tax offset. That means that excess concessional contributions are taxed as if they had been received as salary instead of as a superannuation contribution. The tax offset represents the 15% contributions tax already paid by the superannuation fund in relation to the contribution.

The released amount must be paid to the ATO rather than directly to the individual. The ATO will deduct any additional taxes required, as well as any other outstanding tax bills, and refund what is left to the individual. So, if the opportunity has been overlooked this year, it may not be that big a deal.