One of the main responsibilities of Australian employers is ensuring on-time super contributions. All eligible employees are entitled to payments into their superannuation fund of choice, with non-compliance leading to SG penalties.
Strict superannuation laws make it vital to abide by ATO obligations and make accurate payments on time.
With many staff and business owners opting for Self Managed Super Funds to control their retirement, it’s worth speaking to experienced SMSF consultants at Linc Accountants about gaining key tax advantages, and complying with super and tax laws.
What is superannuation?
Superannuation, commonly known as super, is a pension/retirement benefit fund. Almost all working Australians submit regular income deductions into these funds, and by law employers must also make consistent contributions .
There are many options for a super fund, from retail and industry funds to private SMSF funds. Regardless of whether your employee is casual, part-time, or a temporary resident, they are eligible for super payments.
Employer’s super contribution responsibilities
The minimum super contribution employers must pay is 10.5% of their OTE (ordinary time earnings), known as the super guarantee (SG).
- This compulsory SG payment and income must be correctly calculated by employers taking into account applicable commissions, paid leave, shift loadings, and allowances – some allowances, overtime and bonuses are excluded
- Pay super minimum of 28 days after every quarter
- Retain 5 years of records to show financial obligations were met
- Display super contribution information on employee payslips
- Tax file numbers (TFN) are required by super funds from employers by law
Employees are allowed to select their own super fund of choice, and if details are not provided employers must find their stapled fund – knowledgeable SMSF consultants can help with payments for self-managed funds.
How to lodge super contributions
While super payments must be paid at least quarterly, many employers choose to file them alongside staff wages for clarity and convenience. Super contributions can be lodged electronically to either a complying super fund directly or through the ATO Clearing House.
Salary sacrifice superannuation must be paid monthly.
Small business accounting can help eligible companies streamline their super responsibilities via a Business Superannuation Clearing House. Speak to Linc Accountants about small business bookkeeping to minimise time, paperwork, and payment errors by submitting a single payment for all employees’ funds via an electronic clearing house.
How experienced SMSF consultants can help you avoid penalties
SG charges are a financial penalty handed down by the ATO to employers who fail to meet essential obligations including:
- Incorrect super payments
- Late filings
- Inaccurate records
- Not providing TFNs
- Failure to pay contractor’s super, if applicable
Utilise expert small business accounting
Linc Accountants are Perth’s trusted experts at small business bookkeeping, helping companies with essential tax compliance and accurate super contributions with over 20 years of niche experience.