As an employer, there are many obligations you need to fulfill to meet Australian superannuation and tax legislative requirements. Firstly, you need pay contributions to a complying super fund or retirement savings account, such as Christian Super, and then consider the following:
MySuper – We’re authorised!
You may have heard the term ‘MySuper’ recently. So what is it? It’s new legislation the government introduced to make it easier to compare super funds. Similar to the MySchools website, the government plans to develop a website that will assist people in comparing returns and fees across like superannuation products.
From 1 January 2014, all employers will need to pay their default contributions to a MySuper authorised superannuation fund.
This means all super funds need a license to offer a MySuper product. For employers with Christian Super, there is nothing you need to do. We have worked hard to be MySuper compliant – so it’s business as usual.
For more information read our MySuper Fact Sheet.
Are the other superannuation funds you contribute to authorised for MySuper? Click here to download the APRA (Australian Prudential Regulation Authority) list of authorised funds (last updated by Christian Super in January 2015). Visit APRA’s website for the latest updates.
How much do I need to pay?
As an employer, you are required to pay a minimum of 9.50% of your employee’s monthly or quarterly earnings. This includes the amount they have earned from ‘ordinary time earnings’, such as:
- Over-award payments
- Paid leave
However, this does not include amounts paid for work performed outside of ordinary hours (‘overtime’). To find out more about ‘ordinary time earnings’ and calculating the exact amount of super contributions you need to pay for your employee(s), contact the ATO on 13 10 20 or visit www.ato.gov.au.
|Superannuation Guarantee||Current Rate|
|From 1 July 2014||9.50%|
|From 1 July 2015||9.50%|
|From 1 July 2016||9.50%|
|From 1 July 2017||9.50%|
|From 1 July 2018||9.50%|
|From 1 July 2019||9.50%|
|From 1 July 2020||9.50%|
|From 1 July 2021||10.00%|
|From 1 July 2022||10.50%|
|From 1 July 2023||11.00%|
|From 1 July 2024||11.50%|
|From 1 July 2025||12.00%|
Source: Minerals Resource Rent Tax Repeal and Other Measures Act 2014. This information is current as at September 2014.
Are my employees eligible?
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
- works on a full time, part-time or casual basis
You also need to pay super for an employee less than 18 years of age who earns more than $450 per month (before tax) and works for more than 30 hours per week on any basis.
My employee wants to add to their super – what does that mean for me?
An employee may choose to make a personal contribution in one of two ways:
- through a voluntary after-tax contribution
- through salary sacrifice (a voluntary before-tax contribution)
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 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 9.50% superannuation guarantee contributions you have to pay.
You can also claim a full tax deduction for super payments you make for employees.
I have employees overseas – do I need to pay super for them?
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.
When do I need to pay?
You need to pay super for eligible employees from the first day you employ them. You can make contributions monthly (payment date is 28th of the following month) or quarterly, but it must be a minimum of four times a year as per the following:
|Quarter||Period||Payment cut-off date|
|1||1 July – 30 September||28 October|
|2||1 October – 31 December||28 January|
|3||1 January – 31 March||28 April|
|4||1 April – 30 June||28 July|
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.
What else do I need to do?
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.
What happens if I fail to meet my obligations?
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.
Note: Christian Super does not intend to exhaustively recite your superannuation and tax obligations as an employer under Australian law. You are advised to seek independent professional advice in effectively meeting your obligations as an employer.