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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...
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
