Reporting super – are employers getting it right?

I was working on a submission to Treasury this week on amendments to the legislation for Reportable Employer Superannuation Contributions (RESC). While the changes aren’t particularly controversial, the submission raised a bigger issue – are employers getting their reporting obligations right?

RESC are super contributions employers make for employees where the contributions are in excess of the superannuation guarantee of 9%. They must be reported on an employee’s annual payment summary.

Why is RESC required to be reported?

The law exists so that an employee’s entitlement to government assistance programs can be determined. There was a concern that people could salary sacrifice their earnings into superannuation and become eligible for various government handouts as a result of their reduced salary and wages component.

Some Chartered Accountants have expressed concern that employers may not fully understand their obligations about what to report, or the implications of getting it wrong. Some, they say, are reporting the compulsory 9% superannuation guarantee amounts (which they are not meant to do) and others are not reporting any amounts at all!

The result is that some people are being overpaid on their government entitlements, and others are missing out!

I would be very keen to hear of other people’s observations – as an accountant, as an employer or as an employee. Would you know how to determine if the right amount was on your payment summary?

Is the answer as simple as more education for employers or is it all just too complicated?