CC Micro Chips Pty Ltd (CC) has been performing poorly over the last few years
Sales of CC Micro Chips are down and the company is looking at sustaining a loss of $4M in the 2017/18 financial year.
In order to address these concerns, CC’s board of directors appoints a new sales manager (Gillian), to manage the existing sales staff with the aim of lifting sales by 20%.
Gillian’s employment contract with CC is as follows:
- Annual remuneration of $200,000 with an additional lump sum payment of $40,000 if sales increase by 20% in the first year
- A superannuation contribution of 15% of Gillian’s total annual remuneration to her nominated superannuation fund. This is higher than the statutory requirement of9.5%
What is the deductibility for CC the annual remuneration + bonus and the deductibility for the superannuation contribution?
Please support answers with case and legislative authority