Getting super right is an important part of being an employer. Likewise, as an employee, ensuring your employer is correctly paying your entitlement in a timely manner is also something to be considered.
Unfortunately, we often see that during a cashflow crisis in a business, whether it be a short or long term problem, ceasing paying employee superannuation is often the first thing employers choose to do, even if all employees are closely held or related to the employer.
We always advise clients that such action is very unwise and it is better to negotiate payment terms with the ATO for BAS or income tax debts or consult us to review your business and find other solutions to help returning the business to profitability.
In any case, many employers despite best efforts, still get super wrong. So to help we have outlined a 5 steps checklist to help you get it right:
- Check you’re paying for the right people. You need to pay super for all of your eligible employees. Most employees and some contractors are eligible for super.
- Check you’re paying the right amount. Currently you need to pay 9.5% of your employee’s ordinary time earnings (OTE). This is not calculated by simple reference to an employees salary package as some payments made to employees do not fit the definition of OTE (e.g.. overtime hours, some allowances and parental leave)
- Check you’re paying on time. You need to pay super at least quarterly (within 28 days after the end of each quarter) . Some super funds, awards or agreements may require more frequent payments.
- Check you’re paying to the right place. You must pay super into a complying super fund or Retirement Savings Account. Most employees can choose their own fund.
- Check you’re paying the right way. All employers must now use SuperStream when paying super. This means you pay employee super and send all their information electronically though one channel in a standard format. It’s easier than ever to pay super under this method and will save you time as you can make all contributions in a single transaction, even if going to multiple funds.
- All businesses should now be SuperStream compliant and if you have not made the switch to SuperStream, please talk to us to find the solution that best suits your needs. More information on this matter can found on the ATO website on the link below
- Link – https://www.ato.gov.au/super/superstream/employers/employer-checklist–a-step-by-step-guide/
And finally, you need to keep records to show how much super you have paid, when you have paid, and that you’ve offered a choice of fund to your employees.
