Understanding Super Guarantee (SG) Obligations
Superannuation, or super, is an essential part of Australia’s retirement income system, comprising three main parts:
- compulsory super
- voluntary super and
- the age pension
As an employer, it’s crucial to meet your super obligations to your eligible workers.
Determining Who Needs Super
You must pay the SG charge if you fail to provide the minimum super guarantee for your eligible employees. This guarantee is calculated based on the employee’s ordinary time earnings and the current super guarantee rate, payable at least four times per year.
Identifying Eligible Employees
To ensure compliance, use tools like the Super Guarantee Eligibility Tool. Note that starting from July 1, 2022, employees under 18 years old must receive super guarantee if they work over 30 hours weekly.
Setting Up Super for Employees
When setting up super for your employees:
- Inform them of your default fund.
- Offer eligible employees a choice of super fund.
- Request details of their stapled super fund if they joined your workforce after November 1, 2021, without making a choice.
- Provide TFN to their super funds.
- Maintain super guarantee employer records for five years.
Calculating and Paying Super Contributions
Ensure you accurately calculate and pay super contributions:
- Identify salary or wages and ordinary time earnings.
- Use tools like the Superannuation Guarantee Contributions Calculator.
- Pay super quarterly by the due dates. We have the dates hand here.
- Pay and report electronically to be SuperStream compliant.
- Consider using the free clearing house if applicable.
Rectifying Late Payments
If you miss payments, rectify them promptly:
- Calculate the super guarantee shortfall and nominal interest.
- Expect an administration fee per employee per quarter.
- Notify the ATO of any payment delays.
Reducing Penalty Risks
To minimise penalties:
- Engage and communicate with the ATO early.
- Understand penalty circumstances and types.
- Know your rights regarding amendments, appeals, objections, and reviews.
Need help with payroll and superannuation? Feel free to get in touch with us at hello@fourtwelve.com.au. We can also be reached here.
