Superannuation: A Guide for Employers
12 December 2016
One of the many obligations you face as an employer is to pay superannuation for your staff on top of their regular salary or wages. The rules around super are governed by legislation, and there are penalties for non-compliance – so it’s critical that you understand what you need to do.
This article sets out some basic information about super for employers – but it’s important that you seek professional advice to fully understand how the rules relate to your particular circumstances.
What is the contribution amount you need to pay?
For most employees, the Super Guarantee (SG) contribution amount is currently equal to 9.5 per cent of their salary (and will gradually increase to 12 per cent by 2025).
What about overtime and other payments?
You must pay super based on your employees’ ‘ordinary time earnings’ – as well as payments for their ordinary hours of work. This includes commissions, shift loadings, over-award payments, and certain bonuses and allowances. It does not generally include payments for overtime hours.
How often do you have to make super contributions for your employees?
You must make SG contributions to your employees’ accounts at least every quarter, unless they’re exempt. Payments are required by the 28th day of the month following the quarter in which the contribution was deducted (being 28 January, 28 April, 28 July and 28 October), otherwise you may become liable to pay the Superannuation Guarantee Charge (SGC). The SGC is a non-tax-deductible charge and may include interest and penalties.
Do you have to pay super for all employees?
Generally, you must pay super for employees if they are:
- Aged over 18 and are paid $450 or more (before tax) in a calendar month
- Under age 18, work more than 30 hours a week and are paid $450 or more (before tax) in a calendar month.
As well as your full-time employees, the above also applies for part-time and casual workers and for temporary residents.
Where do you pay super contributions?
Those of your employees who are eligible to be paid super may also be able to choose the fund you pay into. For those employees who are eligible, you must provide a Standard Choice Form to them within 28 days of their start date. If they aren’t eligible to choose, or they don’t make a choice, you must pay their contributions into your employer-nominated or ‘default’ fund.
This means that you must choose a super fund as your employer-nominated or default fund. The fund you nominate must be a ‘complying fund’ (i.e. one that meets the requirements and obligations of super law), and be registered by the Australian Prudential Regulation Authority to offer a MySuper product. To make sure your fund is complying, check with the trustee or authorised representative of the fund, or check the Australian Tax Office’s register of complying super funds.
How do you pay super contributions?
From 28 October 2016, all employers are required to provide payments to super funds in a specific electronic format called SuperStream. Employers with 19 or fewer employees, or with an annual aggregated turnover of $2 million or less, can use a free* service administered by the ATO called the Small Business Superannuation Clearing House. This lets you make your super contributions as a single electronic payment to the Clearing House, which then distributes your payments to your employees’ funds.
Some super funds, including Suncorp’s, offer their own in-house online administration and super payment solutions that are designed to meet all your superannuation and SuperStream compliance obligations.
*Super payments made by EFT or BPAY from a credit card account may incur a fee from the financial institution.
What records do you need to keep?
The ATO requires that you keep records for five years that show:
- the date and amount of super you paid for each employee
- how you worked out the level of super you paid
- that you have offered your eligible employees a choice of super fund
- the details of the super fund that you paid your employee’s super into.
How can Suncorp make life easier for busy employers?
If you’re running a business you’ll know that managing your superannuation obligations to your employees can be a time-consuming hassle.
We can help make managing your obligations in relation to your employees’ super easy by providing a simple-to-use payment solution that will help you meet your choice of fund requirements. So you spend less time on super, which means more time for your customers. The service could also be free for you to use if conditions are satisfied.^
Our super products, Suncorp Brighter Super and Suncorp Everyday Super, are designed to be ‘fuss free’ with great online features for your employees.
Saving you time
Our online administration system and payment solution, Suncorp EASETM (technically, it’s what is called a ‘superannuation clearing house’), helps to remove the hassle when it comes to managing contributions for your employees’ super, especially if you’re paying super to multiple funds. Suncorp EASE is all about:
- Flexibility - choose whether to input each employee’s details on screen individually, or upload a payroll file if you’ve got lots of employees
- Control - employee information and super payments at your fingertips
- Simplicity - one easy-to-use online interface for managing multiple super payments.
Find out more
- Give us a call on 13 11 55
- Speak to your financial adviser
- Visit www.suncorp.com.au/super/employers
- Visit the Australian Tax Office website at www.ato.gov.au/Business/Super-for-employers/
^Suncorp EASE™ is a free service as long as you contribute to the Suncorp Master Trust, which you may nominate as you default fund under the Choice of Fund regime, for more than 50% of your employees. This rule will be based on the total number of your employees you make contributions for at the time you provide the required contribution information to us.
This is general information only and doesn’t take into account your personal objectives, financial situation or needs. Before making any decision about whether to acquire or continue to hold any financial product, please read the relevant information and the Product Disclosure Statement (PDS) and obtain professional advice. For Suncorp Everyday Super you should read and consider the Suncorp Everyday Super PDS and Product Guide. For Suncorp Brighter Super, please read and consider the Suncorp Brighter Super Personal Super and Pension PDS or for Suncorp Brighter Super Business Super please read and consider the Suncorp Brighter SuperBusiness Super PDS. Everyday Super and Brighter Super are part of the Suncorp Master Trust (Fund) (ABN 98 350 952 022, RSE Fund Registration No. R1056655). Suncorp Portfolio Services Limited (Trustee), ABN 61 063 427 958, AFSL 237905, RSE Licence No L0002059 is a related body corporate of Suncorp Group Limited ABN 66 145 290 124. The products referred to are not bank deposits or other liabilities of Suncorp Bank (Suncorp-Metway Limited ABN 66 010 831 722) (SML) and are subject to investment risk including possible delays in repayment and loss of the interest and principal invested. SML is not liable or responsible for, and does not guarantee or otherwise support, Suncorp Everyday Super or Suncorp Brighter Super accounts.
Suncorp EASE (clearing house), is issued by Suncorp Portfolio Services Limited (SPSL) ABN 61 063 427 958 AFSL 237905 RSE License L0002059. Before deciding whether to acquire or continue to hold Suncorp EASE (clearing house) all persons should obtain, read and consider the relevant Product Disclosure Statement and Product Guide