1 general conditions of employment - Department of Education and ...

9 SUPERANNUATION9.5.4.6 Employee’s are able to change salary sacrifice arrangements at any time throughout theyear.9.5.4.7 The staff member may cease salary sacrifice arrangements at any time by notifying theappropriate salaries or payroll unit in writing of the intention to cease.9.5.4.8 An employee who is repaying, under arrangement with the Department, an outstandingamount which results from an overpayment of salary, or a debt resulting from a courtorder such as a garnishee, is not eligible to participate in the salary sacrifice schemeuntil repayment is finalised.9.5.4.9 Recovery of an outstanding amount which results from an overpayment of salary or acourt order for an employee who is already participating in salary sacrifice tosuperannuation will be based on the employee’s gross salary (i.e. pre-salary sacrificesalary).9.5.5 BENEFITS OF SALARY SACRIFICE TO SUPERANNUATION9.5.5.1 Depending on personal circumstances, there may be taxation benefits from salarysacrifice to superannuation. For example, with salary sacrifice to superannuation,superannuation contributions are taken out before PAYE tax is calculated, so PAYE taxwill be calculated on a lower income level. Generally staff will only pay a 15%contribution tax (administered by the superannuation fund) on salary sacrifice tosuperannuation contributions, so the tax on these contributions may be less than themarginal tax rate. This may change over time if tax rules change.9.5.5.2 As everyone has different financial circumstances, staff are strongly advised to seekprofessional financial advice prior to commencing salary sacrifice to superannuation tomake sure that salary sacrifice to superannuation is appropriate.9.5.6 CHOICE OF SUPERANNUATION FUNDSSalary sacrifice contributions can be made to First State Super (FSS), or any complying privatesuperannuation fund under the Commonwealth Superannuation Guarantee Charge Act 1992and the Commonwealth Superannuation Guarantee (Administration) Act 1992. Staff will need toconfirm with a fund other than FSS that it is a complying fund and include the fund’s compliancenumber on the application to enter the salary sacrifice to superannuation scheme. Salarysacrifice payments may only be made to one fund, not multiple funds.9.5.7 EFFECT ON SSS OR SASS CONTRIBUTIONS OR ENTITLEMENTSNormal superannuation contributions to, and benefits from, these schemes are not reduced bysalary sacrifice to superannuation.9.5.8 EFFECT ON NET PAYNet pay will be reduced, as salary sacrifice to superannuation contributions are made from thegross, or pre-tax, pay.9.5.9 EMPLOYER SUPERANNUATION GUARANTEE CONTRIBUTIONSAll employers must comply with the superannuation guarantee contribution laws which requireemployer contributions of 9% of salary. Salary sacrifice by a staff member will not reduce thosecontributions by the employer, which continue to be calculated on the same basis as beforeHandbook for non teaching staff in schools Page 9 − 13