Superannuation Contributions Tax: employer contract payment and the calculation of adjusted taxable income

Is a contract payout amount from an employer included in the calculation of the member's adjusted taxable income (ATI) for superannuation contributions surcharge purposes under the provisions of the Superannuation Contributions Tax (Assessment and Collection) Act 1997 (SCTA)?

Yes. A contract payout amount from an employer is included in the calculation of the member's ATI for superannuation contributions surcharge purposes under section 43 of the SCTA.

The member received a gross contract payout from their employer. The member's taxable income for the financial year included that employer payout amount.

The member received a superannuation contributions surcharge assessment in respect of surchargeable contributions made to the member's superannuation provider.

In calculating the member's ATI, the amount representing the employer payout was included in the calculation.

Section 43 of the SCTA defines a member's ATI for a financial year. Paragraph (a) of the definition of 'adjusted taxable income' in section 43 of the SCTA includes in ATI the member's taxable income, with some adjustments made according to subparagraphs (a)(i) and (a)(ii) of the definition (which relate to employer eligible termination payments and lump sum payments made in certain circumstances).

A contract payout from an employer formed part of the member's taxable income. Neither of the above mentioned subparagraphs exclude an employer contract payout amount from being included in the calculation of ATI. As such, the employer payout forms part of the member's ATI. Note: Since the above decision was made, amendments to the Superannuation Contributions Tax (Assessment and Collection Act) 1997 have resulted in the definition of 'adjusted taxable income' (ATI) no longer being contained within section 43. The calculation of ATI is now determined with reference to section 7A or 7B of that Act (depending on the circumstances of each particular case).

These amendments, effective from 5 June 1997, do not affect the above decision.