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Super Guarantee Client Health Check

Paying super for employees is a crucial part of being an employer because it will provide employees with an income after they have retired some day.


The handy checklist below has been designed to assist small and large businesses that hire employees meet their super guarantee (SG) obligations. Tax professionals can also make use of it so they can show clients what their obligations are in this regard.


Paying Super to All Eligible Staff Members


You will have to:


  • Pay SG to a staff member if they have been paid more than $450 before tax in a calendar month (there are special conditions for employees under 18 years of age as well as contract workers. Company directors who receive payments when working as directors are also eligible for SG contributions as the business is their employer for SG purposes).
  • Pay for SG if you hire eligible contractors – in some cases, contractors who already have their own ABN might still be eligible for SG.
  • Claim super contributions as a legitimate tax deduction. A tax deduction may be claimed for super payments that have been made for staff members in the financial year that they are being paid. Contributions are only considered as paid when they have been received by the super fund.


Ensuring you Pay the Right Amount of Super


You will be required to:


  • Pay the minimum amount of 9.5% of ordinary time earnings (what staff members earn for regular work hours and this includes items such as commission, allowances and shift loading – but not payments for overtime.
  • Pay the correct SG rate that has been based on your staff member’s award, as some of them are higher. If an award stipulates a rate of less than 9.5%, you will still be required to meet the minimum 9.5% of ordinary time earnings requirements.


Ensuring that Super is Paid on Time


You must:


  • Pay any required SG at least every quarter by the stipulated quarterly due dates. It’s important to keep in mind though that some super funds will require monthly contributions to be made.
  • Making payments more regularly could make it easier to meet all of your super obligations and manage your cash flow.
  • Interest and penalties could apply if any quarterly super payment dates have been missed.


Paying Super to the Correct Place


You will need to:


  • Provide your staff members with a choice regarding which super fund they would to have their money paid in.
  • Check their award and provide staff members with a super choice form.


Paying Super in the Correct Manner


You will be required to:


  • Report and pay electronically in the SuperStream standard
  • Consider using the new Small Business Superannuation Clearing House. This is a free service offering where you are able to make your SG contributions as a single electronic payment. From there, the Charging House will distribute the payments to the various funds that have been chosen by your staff members.


Keeping Related Records


You will be required to:


  • Keep all relevant records showing that you have fulfilled your SG obligations. These records will need to be kept for 5 years to show how much SG you have paid and how the amounts for it were calculated. Your records will also need to show that you have offered your staff members a choice of which super fund they want to use.
  • Get in touch with the ATO as soon as possible if you have made any errors with regards to meeting your super obligations. We are able to provide the necessary support and assistance to employers who want to do the right thing and participate willingly in the SG system.

Get the ATO Check List Here:

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