Earn frequent flyer points when paying employee superannuation

By Chris Chamberlin , May 19 2016
Earn frequent flyer points when paying employee superannuation
Disclaimer

Executive Traveller may receive a commission when you apply for these credit cards via our links.

You should seek independent advice and consider your own personal circumstances before applying for any financial product.

Employee superannuation is a cost you can’t avoid as a business owner – but fortunately, there’s a way to earn frequent flyer points when paying your compulsory 9.5%.

It’s done by using your American Express card to make these payments through the Ozedi Direct service, much as you can pay the Australian Taxation Office by credit card for things like BAS, PAYG and other tax obligations.

What’s more, Ozedi Direct can link with your existing company payroll system to keep things simple or can also capture data from easy-made Microsoft Excel spreadsheets to assist smaller businesses, but note that other cards including Visa, MasterCard and Diners Club aren’t accepted.

Paying super by plastic: what it costs

You’ll pay two fees for this privilege – the first is a fixed charge based on the number of employees receiving super payments, ranging from $11 per month for businesses with 20 staff or less through to $275 for companies with up to 5,000 employees, with negotiated rates for larger corporates.

Secondly, you’ll pay a processing charge of 2.64% (2.4% + GST) when making superannuation payments using an American Express card, which is treated by your bank as a purchase, rather than a cash advance.

When using a points-earning card, that means you can earn frequent flyer points on every dollar you spend, subject to your card’s usual earning rates and limits.

Paying super by plastic: does it add up?

Take as an example a business with 10 staff members who each earn $60,000/year, plus superannuation of $5,700 at the compulsory 9.5% contribution rate.

Over 12 months, the company could be pay its $57,000 of super obligations via Ozedi Direct, attracting $1,504.80 in AMEX processing fees and $132 in monthly charges ($11/month) for an all-out price of $58,636.80.

Make those payments on an American Express Platinum Business Card and you’d pocket 58,636 Membership Rewards points, equal to 58,636 Etihad Guest miles and enough for a return trip from Sydney to Perth on Virgin Australia with one leg in business class and the other in economy.

Work or rest en route to Perth using points earned on company super bills...
Work or rest en route to Perth using points earned on company super bills...

Or, earn points in a different way by using the Commonwealth Bank Business Awards Platinum AMEX, which pulls in the equivalent of 1.5 Virgin Australia Velocity points per dollar spent or 87,954 Velocity points on the same amount.

That’s enough to fly Sydney-Perth return in business class (plus a small amount in taxes and fees) – a journey that would otherwise sell for around $4,000, but at a net cost to your business of $1,636.80 in fees paid to Ozedi Direct, or less than half the normal fare.

When you also factor in your card’s interest-free period and the improvements that can bring to your business’ cash flow, paying super using your business or corporate AMEX card is a smart way to boost your frequent flyer points to fly high for much less than the usual sticker price.

Also read: Earn frequent flyer points on tax, HECS payments

Follow Australian Business Traveller on Twitter: we're @AusBT

Disclaimer

Executive Traveller may receive a commission when you apply for these credit cards via our links.

You should seek independent advice and consider your own personal circumstances before applying for any financial product.

Chris Chamberlin

Chris Chamberlin is the Associate Editor of Executive Traveller, and lives by the motto that a journey of a thousand miles begins not just with a single step, but also a strong latte, a theatre ticket, and later in the day, a good gin and tonic.

Virgin Australia - Velocity Rewards

26 Feb 2016

Total posts 101

Earning 1.5 VA points for every dollar spending on AMEX equals (approx.) 1-2 cents of net cost (the marginal surcharge for the business to accept AMEX payments, comparing to debit card payments) for a VA point, not too bad. 

19 May 2016

Total posts 15

Plus I presume that the charges incurred in paying by this method are tax deductible for the business - so a further ~30% off.

Qantas - Qantas Frequent Flyer Platinum

07 Feb 2013

Total posts 558

You have to be pretty desperate to pay these sorts of fees for a few points, cheaper off just paying for the ticket.

How so, when the cost of 'buying' the points in this way is less than half the retail fare, even with the small payment to cover airline fees and taxes considered?

Not the cheapest way to earn points, certainly, but a good way to maximise the number you can earn.

Qantas - Qantas Frequent Flyer Platinum

07 Feb 2013

Total posts 558

Less than half the retail fare? I think you need to do your maths again.


Hi Guest, join in the discussion on Earn frequent flyer points when paying employee superannuation