Missed SG exemption may not be problem
Failing to exempt an employer from SG contributions may not be critical for some superannuants if it does not alter their tax position.
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Superannuants who do not meet a looming deadline to inform their employers they are exempt from superannuation guarantee (SG) obligations may find it makes little overall difference, according to an SMSF specialist.
SMSF Alliance principal David Busoli said high-income earners who had multiple employers, such as doctors employed by different hospitals, had until 31 January to inform any employer if they did not want them to pay SG contributions in order to prevent a breach of the concessional contribution cap.
“This can be avoided by applying for a superannuation guarantee employer shortfall exemption certificate to release some of their employers from their SG obligation. A separate application is required for each financial year,” Busoli said.
“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.”
He added failing to meet that deadline may not be a significant issue and an exemption could have negative implications for the member’s overall remuneration and entitlements, and without some form of compensating adjustment, it may be better to receive the excess contribution.
“Excess concessional contributions are included in the individual’s assessable income for the year of contribution and taxed at marginal rates less a 15 per cent non-refundable tax offset,” he explained.
“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 per cent 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.”
January 28, 2026
Jason Spits
smsmagazine.com.au
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