There are a number of reasons why the terms of an employment
agreement should be reviewed and updated from time to time. One
good reason why the terms of a senior employee's employment
agreement should be reviewed prior to 1 July 2012, is to ensure
that the concessional superannuation contributions which are made
by the employer on behalf of the employee, either under the terms
of the employment agreement or under a salary sacrifice
arrangement, do not cause the employee to become liable for penalty
tax.
Superannuation contributions can be divided into two types,
concessional (before-tax) and non-concessional (after tax).
Concessional contributions include all contributions made by the
employer including those which the employer is required to
contribute by way of the compulsory superannuation levy and all
contributions made under a salary sacrifice arrangement.
