Which of the following statements is correct? A. Superannuation concessional contributions are made exclusively by employees. B. Superannuation Guarantee is paid exclusively by employers. C. Superannuation contributions are all taxed at 15%. D. Superannuation contributions made by employers have to be 10.5% of the employee's earnings.
Question
Which of the following statements is correct?
A. Superannuation concessional contributions are made exclusively by employees.
B. Superannuation Guarantee is paid exclusively by employers.
C. Superannuation contributions are all taxed at 15%.
D. Superannuation contributions made by employers have to be 10.5% of the employee's earnings.
Solution
The correct statement is B. Superannuation Guarantee is paid exclusively by employers.
Here's why:
A. Superannuation concessional contributions are not made exclusively by employees. They can also be made by employers or by the self-employed.
B. Superannuation Guarantee is indeed paid exclusively by employers. It's a mandatory contribution employers have to make into the superannuation accounts of their eligible employees.
C. Not all superannuation contributions are taxed at 15%. While concessional contributions (like those made by employers or the self-employed) are generally taxed at 15%, non-concessional contributions (like those made from after-tax income) are not taxed in the super fund.
D. The Superannuation Guarantee rate is currently set at 9.5% of an employee's earnings, not 10.5%. However, it's worth noting that this rate is set to gradually increase to 12% by July 2025.
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