A 

Monica who is aged 54, is employed as a Senior Manager with Abacus, a large accounting firm based in Sydney. During the 2020 tax year Abacus contributed $20,000 into QRest Super, which Monica advised is her complying Superannuation Fund of choice. In addition, on 30 June 2019 Monica entered into a salary sacrifice arrangement with Abacus to sacrifice 20% of her 2020 salary into superannuation. This results in an additional contribution of $52,000 for the 2020 tax year. This is the first time Monica has made a salary sacrifice arrangement. Monica’s marginal tax rate is 45% (excluding Medicare Levy) and her superannuation balance as at 30 June 2020 was $900,000.

Discuss the tax consequences for Monica and Abacus (if any) arising in relation to the above facts.

PART B 

Discuss:

1. the effect of s 12 of the Superannuation Guarantee (Administration) Act 1992 (Cth) (3 Marks); and
2. the criteria the Commissioner ordinarily takes into account when deciding whether a person working under a contract is an employee or an independent contractor. (5 Marks)

Answer rating: 100% (QA)

A Salary sacrifice is the method of reducing gross pay by the amount of the pension contribution which in turn reduces the pay on which you calculate Tax Employee and Employer National Insurance Salar... View the full answer