Your obligations as an employer

As an employer, there are many obligations you need to fulfil in order to satisfy various Australian legislative requirements in superannuation and tax. Firstly, you need to organise to pay any contributions to a complying super fund or retirement savings account, such as Christian Super, and then consider the following:

As an employer, you must pay a minimum of 9% of your employee’s monthly or quarterly earnings. This includes the amount they have earned from ‘ordinary time earnings’, such as:

• Over-award payments
• Commissions
• Allowances, and
• Paid leave

However, this does not include amounts paid for work performed outside of ordinary hours (‘overtime’). To find out more on ‘ordinary time earnings’ and accordingly refine the exact amount of super contributions you need to pay for your employee(s), contact the ATO on 13 10 20 or visit their website at www.ato.gov.au.

You need to pay super for eligible employees from the first day you employ them, four times a year as per the following:

When a cut-off date for payment falls on a Saturday, Sunday or public holiday, you can make the payment on the next working day if necessary.

Generally, you have to pay super for any employee who:

• is between 18 and 69 years of age
• you pay $450 or more (before tax) in a calendar month, and
• works on a full time, part-time or casual basis

You will also need to pay super for an employee less than 18 years of age who earns more than $450 per month and who works more than 30 hours per week on any basis.

An employee, if aged 75 of less, may choose to make a personal contribution in one of two ways:

• 1.Through a voluntary after-tax contribution, or
• 2.Through salary sacrifice.

Salary sacrifice is an arrangement where an employee agrees to forgo part of their future salary or wages in return for a product or service, such as superannuation. If an employee chooses to contribute to their super through salary sacrifice, it reduces their taxable income and, for tax purposes, is not considered a fringe benefit.

A salary sacrifice arrangement, if it meets certain requirements (see www.ato.gov.au), can also benefit you as an employer in that:

• you can claim a full tax deduction for the amount your employee sacrifices, even if they pay more than the compulsory amount;
• the amount your employee sacrifices can count towards the 9% superannuation guarantee contributions you have to pay.

You can also claim a full tax deduction for super payments you make for employees under the age of 75, and for those 75 or older who are under an industrial award, determination or notional agreement preserving state award.

There are agreements between Australia and some overseas countries under which you do not need to pay super contributions (or equivalent) in the country your employee has temporarily been sent to. However, your super obligations as an Australian employer still apply, and you will need to continue to pay compulsory super contributions in Australia. For more information on which countries are included in these agreements, see www.ato.gov.au or call 13 10 20.

It is also important that you:

• Pass on a new employee’s tax file number to their super fund before you pay their next contribution;
• Pay super contributions on salary or wages back-paid to former employees; and
• Keep copies of your agreement and records of your superannuation payments for at least 5 years.

You must lodge a Superannuation Guarantee Charge Statement if you:

• Have not paid enough super contributions for your employee;
• Have not paid all super contributions by the quarterly cut-off date;
• Have not paid into your employee’s chosen super fund; and/or
• Have paid a super contribution after the cut-off date

Once this is lodged, the ATO will transfer the super guarantee shortfall amount and any interest to your employee’s chosen super fund. However, if you know you are not going to make the due date, remember that you can ask the ATO for an extension. For further information on this and more, please visit www.ato.gov.au.

Note: Christian Super does not intend to exhaustively recite your superannuation and tax obligations as employer under Australian law. You are advised to seek independent professional advice in effectively meeting your obligations as an employer.