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News & Commentary
When the big money stops 26 Feb 10
Professional footballers and cricketers are no different from you and me when it comes to superannuation guarantee (SG) contributions.
The tax commissioner issued a reminder this week of his view that employers of professional sportsmen and women under contract must meet their SG obligations, reports the electronic service Super News Alert, published by Thomson Reuters.
Many high-earning sports stars probably show little interest in their SG contributions at this time.
This is particularly the position given that employers are not required, broadly speaking, to pay more than about $14,500 in SG contributions for 2009-10. (Numerous employers, of course, agree to pay the 9% S contributions on their employees'' full salaries.)
But some professional sports people may feel differently about SG contributions when their playing days are over, their endorsements dry up and the big money stops flowing.
In most sports with a few exceptions such as golf, sporting careers are relatively short and a common dream is to become a television commentator or to succeed in business. But life doesn''t always turn out as planned.
There is a powerful underlying message in the commissioner''s reminder: all employers must meet their SG contributions for eligible employees.
The commissioner notes that employers must use 'ordinary times earnings' (OTE) to calculate the level of SG contributions payable. In short, this means salaries plus commissions and performance bonuses.
'Where a sportsperson is employed under a contract, the tax office considers that their ordinary hours of work will generally be the agreed hours of work if specified under that contract,' reports Super News Alert.
'In other cases, the actual hours worked by the sportsperson will usually be their ordinary hours of work.'
No matter your occupation, it''s always worth checking that your SG contributions are accurate and being paid on time.
* Written by Robin Bowerman, Head of Retail at Vanguard Investments Australia.
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