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Super guarantee opt-out for high income earners now law

From 1 January 2020, eligible individuals with multiple employers will be able to apply to opt out of receiving super guarantee ('SG') from some of their employers, in order to help them avoid unintentionally going over the concessional contributions cap.

If appropriate for them, they will be able to submit the relevant ATO form to apply for an SG employer shortfall exemption certificate, which releases one or more of their employers from their SG obligations for up to four quarters in one financial year.

It is important to note this measure may not benefit everyone who is eligible, so before lodging the form, you should consider your employment arrangements, including how your pay and other entitlements may change (if at all) and the effect of any relevant award or workplace agreement applicable to you.

The measure only became law on 2 October 2019. To give eligible employees time to make an application, the ATO has advised it will accept applications for the 2019/20 financial year as follows:

  • third quarter commencing 1 January 2020 — lodge on or before 18 November 2019; and

  • fourth quarter commencing 1 April 2020 — lodge on or before 31 January 2020.

A separate application will be required for each financial year.

Unsure whether opting out of SG is a suitable option for you? Give us a call and we will work through it with you.

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