Superannuation

Super is money you pay for your workers to provide for their retirements.

If you pay an employee $450 or more before tax in a calendar month, you have to pay super on top of their wages. All employees are covered by the superannuation guarantee. It applies to full-time, part-time and casual workers.

The minimum you must pay is called the super guarantee (SG). The SG is currently 9.5% of your employee’s base earnings (ordinary time earnings).

As an employer, you need to:

• pay super contributions for eligible employees four times a year, by the quarterly due dates, or more frequently if required. Some contractors may also be entitled to super
• pay and report super electronically in a standard format, ensuring you meet SuperStream requirements
• pay super to complying super funds
• check if employees are eligible to choose their own super funds provide eligible employees with a Standard choice form
• advise employees of your employer nominated fund, also known as your default fund. Where employees do not nominate their choice, or until they do, pay their super guarantee into your default fund
• give the employee’s tax file number (TFN) to their super fund within 14 days of receiving their TFN declaration form. If you don't make contributions during this period, you can provide the TFN when you make the contributions
• keep records of super contribution payments and evidence that you offered a choice of super fund to eligible employees

All employers must offer eligible employees a choice of super fund when they start. You’ll need to:

1. Identify new employees who are eligible to choose.
2. Provide eligible employees with a Standard choice form.
3. Act on your employee's choice of super fund.

Due dates for super contributions each quarter are:

• 28 January
• 28 April
• 28 July
• 28 October

Where the due date falls on a weekend or public holiday, the due date is the next business day. If you don't make your superannuation contributions by these dates, you'll face penalties.

If you have employees, you must use SuperStream (the superannuation data and payment standard) to pay super. SuperStream makes it easier to make super contributions. For many employers, you’ll be able to make all your contributions in a single transaction (to multiple super funds).

Under SuperStream, you need to:

• send all super data electronically (such as employee details and the amount of super being paid)
• make contribution payments electronically
• link data and money with a unique payment reference number
• send data and payments on the same day

Some options to help you meet the standard include:

• upgrading your software so that it complies with the standard
• using a service provider that can meet the standard for you
• getting advice from your super fund on how your business can meet the standard

Single touch payroll (STP) is a new way of reporting tax and superannuation information to the ATO. Employers will report their employees' payroll information, such as salaries and wages, pay as you go (PAYG) withholding and super information to the ATO each time you pay them.

From 1 July 2018 STP-reporting became mandatory for large employers with 20 or more employees.

On 1 July 2019 it came into effect for employers with 19 or fewer employees. There is a transitional period available for all employers.

Micro employers with fewer than four employees have additional options, including low cost or no cost products, or reporting quarterly through their registered tax or BAS agent.

If you’re you a small business owner with 19 or fewer employees or have an annual turnover of less than $10 million, the Small Business Superannuation Clearing House (SBSCH) is a free service you can use to make your superannuation guarantee contributions.

The SBSCH makes it easy to pay all your super contributions online in one payment. It also gives you 21 days to pass on your employee’s choice of fund and is SuperStream compliant.

If you’re a sole trader or a partner in a partnership, you can choose whether you pay super to yourself. You don’t have to make super contributions to a super fund for yourself, however it is a good idea. You may want to consider super as a way of saving for your retirement.