Money, money, money must be funny in a rich mans world!
Superannuation is something a lot of us don’t think about very often. As far as we are aware our employer pays our super contribution either weekly, fortnightly, monthly or quarterly and it goes into a black hole that we don’t see until after the age of 65, or so we think.
According to the ABC News, about one third of Australian workers are not being paid their superannuation. Research by Industry Super Australia and Cbus has found these rogue employers are pocketing approximately 3.6 billion dollars per year from 2.4 million Australian workers. Those figures are both scary and insane! With most of us looking at a future with a small pension or none at all every dollar counts to keep our golden years golden.
As an employer superannuation is money you pay your employees to provide security for their retirement.
The minimum superannuation amount you must pay is called the super guarantee (SG). Employers are required to contribute the current minimum 9.5% into the employee’s super fund. This is to be paid on ‘Ordinary Times Earnings’, overtime hours are not included.
If you have employees who are under the age of 18, they will usually only be eligible for super if they earn $450 (before tax) or more in salary or wages in a calendar month and they work more than 30 hours per week.
Employees who are over the age of 18 are eligible for super if they earn $450 (before tax) or more in a calendar month, regardless of their working hours.
As an employer you must pay SG at least 4 times per year by the quarterly due dates. If you fail to meet your responsibilities you may find yourself in hot water. You will open yourself up to needing to pay the Super Guarantee Charge which is made up of the shortfall amount not paid, interest on those amounts and an administration fee calculated on a per employee/per quarter/not paid basis.
Super payments must go into a complying super fund and most employees can choose their own fund. If you are unsure you can get advice from the ATO website. https://www.ato.gov.au/
You also need to be aware that SG contributions must be paid to employees who are on paid leave such as paid sick/personal leave, long service leave and annual leave.
Some Awards, EBA’s and other registered Agreements contain extra terms about superannuation. These terms apply on top of the superannuation guarantee. Always make sure you are aware of an additional terms and conditions that affect your business and employees. If you are unsure give HR Gurus a call on 1300 959 560.
On average, the ATO receive over 20,000 complaints per year regarding superannuation. The ATO can be contacted on 13 10 20 if you have any questions or need to lodge an enquiry.
Written by resident HR Guru Natalie Bol