Superannuation contribution payments count as wages when calculating payroll tax.
Types of superannuation contributions
A superannuation contribution is a contribution paid or payable by an employer on behalf of an employee.
This includes payments:
- to or as a superannuation fund
- as a superannuation guarantee charge
- to or as any other form of superannuation, provident or retirement fund or scheme including:
- the Superannuation Holding Accounts Special Account
- a retirement savings account
- a wholly or partly unfunded fund or scheme.
A superannuation fund is a public sector superannuation scheme, or an indefinitely continuing fund that is a provident, benefit, superannuation or retirement fund. The term ‘indefinitely continuing’ means the fund will not stop at a specified time.
Non-monetary employer-funded superannuation contributions (like a benefit) are liable for payroll tax. The taxable value will be the agreed value or the value attributed to the contribution, whichever is greater.
Employees, directors and contractors
Employers must pay payroll tax on superannuation contributions for:
- employees
- company directors (working and non-working)
- contractors who are treated like employees (called ‘deemed employees’).
1997 payroll tax change
From 1 July 1997, Victorian payroll tax law changed. Employer superannuation contributions are taxable if they relate to work done on or after that date.
This rule is important for defined benefit funds. These are super funds where the final payout is based on a formula, not just how much money was paid in. Regular contributions and top-up contributions to these funds are taxable if they relate to work done on or after 1 July 1997.
If an employer says a super payment made after 1 July 1997 is for work done before that date, they must have clear records to prove it. The Commissioner of State Revenue must agree that the method and calculations are correct.
