Directors Lump Sum Superannuation Payments

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Directors Lump Sum Superannuation Payments

There seems to be some conjecture going around the traps at the moment about PAYG Summaries and Director’s Lump Sum Super Payments.

The bottom line is all superannuation payments that are above the 9.5% Super Guarantee Charge (SGC) needs to be recorded on a PAYG summary, regardless of why or how it was paid.

So take Dave, he’s a director of Dave’s Plumbing Pty Ltd. Dave takes a wage of $40,000 but at year end paid an extra $10,000 to his Superannuation fund. This $10,000 needs to be included as a reportable Superannuation Contribution on Dave’s PAYG Summary.

If Dave hadn’t paid himself any super all year, then 40000 x 9.5% or $3800 is his SGC and the balance $6,200 is reportable super. This is not a recommended process however as under SGC legislation, Dave is required to pay his superannuation quarterly and not eligible to pay a lump sum at year end.

So what if Dave didn’t take any wages?  A PAYG Summary would still need to be completed with just the RESC portion filled out.

Keep in mind when calculating these payments that Superannuation can also be in the form of a life insurance through superannuation – always check payments for “insurances” to make sure they are not actually a superannuation policy. It is common practice to set them up this way to make them tax deductible and they still add up to the SGC amounts and Superannuation Thresholds.


Photo credit: 401(K) 2013 via / CC BY-SA