Employer superannuation obligations

If you are an employer you should be aware that there are some key obligations required for you to comply with superannuation legislation.

Pay 9 per cent superannuation for all eligible employees

If you have employees and/or pay directors fees, you must make Superannuation Guarantee contributions at the rate of 9 per cent of ordinary time earnings.

Pay superannuation contributions quarterly

These contributions must be made at least quarterly, by the 28th of the month following the end of the quarter.

These dates are 28 October, 28 January, 28 April and 28 July. Note that if you make the 28 July contributions before 30 June, you will be able to claim a deduction in the current year.

Superannuation funds may not accept employer payments which are made after the due date. If contributions are not received by the superannuation fund by these dates, you must pay the Superannuation Guarantee Charge as a non-deductible charge to the ATO along with interest and administration fees.

Ensure salary sacrifice arrangements comply with requirements

If you have employees who are salary sacrificing wages and salary for their superannuation contributions, ensure you have an employment agreement in place before the salary is sacrificed to comply with the Fringe Benefits Tax exempt status.

Offer choice of superannuation fund to employees

Employers should nominate a default fund where they will pay employee contributions if the employee has not notified them of their choice of fund. Employers must give all employees a Standard Choice Form which they can complete if they wish to choose a different fund from the employer’s default fund.

Penalties for non-compliance with superannuation choice legislation are reportable on the Superannuation Guarantee Charge Statement – Quarterly.

Notify superannuation funds of your employees’ tax file numbers

Employers are now responsible for passing on their employees’ TFNs to their nominated superannuation fund when they make the first contribution. The superannuation funds use these to pass member contribution information to the ATO.

If an employee’s TFN has not been provided, their contributions will be taxed at the top marginal rate.

Published : 31 January 2008