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Paying super - Top mistakes to avoid

By Claire Burke-Atcheson

Sometimes paying super can seem complicated. Here are the top six mistakes and tips on how to avoid them.

The ATO (Super for employers) reports that common superannuation mistakes include:

  1. Not paying enough super for employees
  2. Missing the due dates
  3. Not keeping accurate records
  4. Not passing on the employees TFN to their super fund
  5. Not understanding when super should be paid for contractors
  6. Error recovery
Below I’ve outlined your obligations and suggestions on how to avoid making these mistakes.

1. Not paying enough super for employees

The amount of super you must pay employees is set out by law. This is currently set at 10% of each employee’s ordinary time earnings (OTE). ‘Ordinary time earnings’ is generally what employees earn for ‘ordinary’ hours of work, including over-award payments, commissions, certain allowances, and paid leave, but not including overtime in most cases.

2. Missing the due dates

For SG contributions, we recommend making monthly payments. Employers that are not required to contribute on a monthly basis under an award or industrial agreement can choose to make quarterly contributions.
- You must pay SG at least four times a year by the quarterly due dates.
- If you don’t pay the SG on time, you may have to pay a fine.

SG quarter Date payment due
1 July – 30 September 28 October
1 October – 31 December 28 January
1 January – 31 March 28 April
1 April – 30 June 28 July

The ATO provides more details about super guarantee.

Missing a payment could result in paying a fine. At Sunsuper, we’ll do everything we can to help you make payment deadlines. Find out more about important dates and deadlines.

If you miss the deadlines, you may have to pay an SG charge. Unfortunately, this charge isn’t tax deductible. While we do accept the payment of Super Guarantee contributions after the due date, you will still be liable to pay the superannuation guarantee charge to the ATO. Also, please be aware that even if you are audited by the ATO, Sunsuper is unable to return your late payment. Find out more about how the ATO deal with missed and late payments.

3. Not keeping accurate records

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.

4. Not passing on the employees TFN to their super fund

Providing your employees' tax file numbers (TFNs) is very important. If you don’t provide your employees’ TFNs to their super fund, they may pay more tax on their super than necessary and they won’t be able to make any voluntary contributions.

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.

5. Not understanding when super should be paid for contractors

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.

You are required to pay SG for permanent and casual employees where they are:
- At least 18 years old or under 18 and working at least 30 hours / week, and
- Earning at least $450/month before tax.

Employees may not qualify for SG payments if they are under 18 or a private or domestic worker and work less than 30 hours per week. Get help determining your employees’ eligibility with the ATO’s SG eligibility decision tool.

6. Error recovery

If a date or amount is missed then a Superannuation Guarantee (SG) Charge Statement should be lodged and often it isn’t. Find the instructions and download the ATO’s Superannuation Guarantee Charge Statement.

By Claire Burke-Atcheson, Manager of Digital Distribution, Sunsuper

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