Make Superannuation Guarantee contributions on behalf of your employees
Most of your employees should be covered by the Superannuation Guarantee (SG) legislation. Generally, employees who are paid $450 or more (before tax) in a calendar month and work on a full-time, part-time, or casual basis should receive super contributions. Some of your employees may ask you to pay an extra portion of their salary or wages into super, either on a before tax (salary sacrifice) or after tax (member voluntary) basis.
If you have employees over the age of 65, a Work Test declaration [PDF 52KB] may be required before salary sacrifice and member voluntary contributions can be accepted by the fund.
There are some employees who are exempt under the SG legislation.
Pay 9.5% of Ordinary Time Earnings
The amount of super you must pay employees is set out by law. This is currently set at 9.5% of each employee’s Ordinary Time Earnings (OTE). OTE is generally what employees earn for their ‘ordinary’ hours of work, including over-award payments, commissions, certain allowances, and paid leave, but not including overtime in most cases.
You are required to keep records that explain your super transactions, including documents that show how you calculated the amount of super you paid for each employee. These records need to be easily accessible and kept in English, or in a format easily converted. Records must be kept for five years.
Choice of fund
Most employees are eligible to choose their own fund. If you have an employee who has chosen a fund, you must make their SG payment to that fund within two months of the choice being made. If no choice is made, you can pay employees super to your default fund.
Pay your Superannuation Guarantee contributions on time
Staying on top of payment deadlines and other dates is important for all kinds of business owners. Missing a payment could result in paying a fine. At Sunsuper, we’ll do everything we can to help you make payment deadlines. Take a look at some of the important dates and deadlines including SG deadlines.
Provide tax file numbers to us
Providing your employees' tax file numbers (TFNs) is very important. If you don’t provide your employees’ TFNs to us, they won’t be able to make any voluntary contributions and may pay more tax on their super than necessary.
When an employee has given you their TFN, the law requires that you pass it on to their super fund. It is generally required that you do this when you next make a contribution for any employee who has given you their TFN.
However, if you receive an employee’s TFN within 14 days of sending your contribution for the employee, then you have up to 14 days from receiving the TFN to pass it on to the fund.
Your TFN responsibilities are to:
- accept TFNs from your employee,
- respect the privacy of employees who quote you their TFN, and
- pass on their TFN when you next make a contribution to the employee’s superannuation fund.
Claim a tax deduction
You can claim a tax deduction for super payments you make for employees in the financial year you make them. Contributions are considered paid when the super fund receives them; it’s not enough that the money has left your bank account. We suggest that you pay before 17 June to allow sufficient time for the funds to be transferred.
We’ll provide you with an update on any changes in superannuation legislation, provide you with solutions to make it easier to administer your super obligations and offer you practical advice on how you can support your employees' well being.