Issue
Is the employee, who has been temporarily transferred from New Zealand to Australia for a fixed term of one year, a 'prescribed employee' for the purposes of paragraph 27(1)(d) of the Superannuation Guarantee (Administration) Act 1992 (SGAA)?
Decision
No. The employee is not a 'prescribed employee'. The employer must, therefore, include the employee's salary in calculating whether it has a liability to pay the superannuation guarantee charge.
Facts
The employee is temporarily transferred from New Zealand to work in Australia for a fixed period of one year. The employee continues to contribute to their personal superannuation fund in New Zealand. The employer is of the understanding that certain employees, such as executives holding certain visas, are excluded from any entitlement to employer superannuation contributions. The employer enquires whether its New Zealand employee is also excluded from such an entitlement.
Reasons for Decision
Section 27 (SGAA) excludes certain salary and wages paid to employees for the purposes of calculating whether an employer has a liability to pay the superannuation guarantee charge. Paragraph 27(1)(d) (SGAA) specifically excludes salary and wages paid to an employee who is a 'prescribed employee'.
Subregulation 7(1) Superannuation Guarantee (Administration) Regulations 1993 sets out who is a prescribed employee for the purposes of paragraph 27(1)(d) (SGAA). The Regulations are specific in their wording. A prescribed employee is required to be a holder of one of the listed visas. There is no provision for employees who do not hold a visa.
In this case, as citizens of New Zealand do not require a visa to work in Australia, the employee did not hold a visa. Accordingly, the salary or wages paid to that employee are not excluded under paragraph 27(1)(d) (SGAA). The employer must, therefore, include the employee's salary in calculating whether it has a liability to pay the superannuation guarantee charge.