When is superannuation payable?
Superannuation should be paid at least quarterly and must be paid by the 28th of the month following the end of a quarter. This means the due dates are 28th October, 28th January, 28th April and 28th July of each payroll year
How much superannuation do I need to pay?
The minimum super you need to pay each quarter for each eligible employee is called super guarantee and is currently calculated as 9.5% of ordinary time earnings (OTE). OTE is usually the amount your employee earns for their ordinary hours of work and includes commissions, shift loadings, allowances and bonuses. You need to check any relevant Award that may specify your employee’s ordinary hours of work.
Do I need to provide confirmation that I have paid the employee’s superannuation contributions to the employees?
No. You don’t need to provide any confirmation to employees when payments are made but you do need to include on employee’s payslips the details of any superannuation contributions for the period.
Do I need to pay superannuation on overtime for my employees?
Generally No. Payments for work performed outside an employee’s ordinary hours of work are not OTE and therefore superannuation is not payable. If you can’t distinctly identify overtime amounts, these hours will be included in OTE and superannuation will be payable.
If I pay above Award wages for my employees, do I calculate superannuation on the Award wages or the amount I am actually paying my employees?
Superannuation is calculated on OTE which includes over Award payments. You need to calculate superannuation on the amount you are actually paying regardless of the Award amount.
Do I have to pay superannuation if my employees are casual or part-time?
Yes. The status of your employees – full time, part-time or casual, does not change your obligations to pay superannuation guarantee.
What do I need to do if I paid my superannuation contributions late or I haven’t paid superannuation to my employees at all?
Unfortunately it’s not as simple as just paying the late amounts to your employee’s superfund. We are also now finding that some superannuation clearing houses will not accept late payments. You need to complete and lodge a Superannuation Guarantee Charge Statement and pay a Superannuation Guarantee Charge (SGC) for each payment that is even one day late.
What is the Superannuation Guarantee Charge (SGC)?
The SGC is calculated as the sum of:
- The shortfall amount – this is the superannuation amount that is late or underpaid
- An interest component which is calculated from the beginning of the quarter in which the contribution was required to be made until lodgement of a SGC statement. It is important to note that catching up late payments without lodging the SGC statement does not stop interest from accruing – this is why it is extremely important that a SGC statement is lodged.
- A $20 administration fee per employee
Can I claim a tax deduction for superannuation that is paid late?
No. The entire SGC amount which includes the super shortfall is not tax deductible.
Can I still claim a deduction for wages paid to employees when I did not pay the employee’s superannuation on time?
Yes. Under the current law, paying superannuation late does not mean that you can’t claim a deduction for wages paid to employees.
My employee hasn’t given me their superfund details. Do I still need to pay their superannuation contributions on time?
Yes. Even if your employee doesn’t give you their superannuation fund details you are still required to meet your normal obligations and payment deadlines. If you don’t have superfund details for your employee you should be making these payments to your nominated default fund. The details of your default fund should be entered on the Super Choice Form you provide your employees on commencement of their employment.
My employee has resigned and their final pay includes annual leave that is owing to them. Do I need to pay superannuation on the annual leave included in the final pay?
No. Superannuation is not paid on unused annual leave.
My employee has a salary sacrifice arrangement in place. What amount do I calculate superannuation on?
From the 1 January 2020, superannuation must be calculated on OTE before any salary sacrifice amounts are deducted from your employee’s gross earnings.
Do I need to pay superannuation for backpackers?
Yes. Backpackers on temporary working holidays in Australia are entitled to the same superannuation payments as Australian citizens.
When don’t I have to pay superannuation guarantee?
You don’t have to pay compulsory superannuation for workers if the following conditions apply:
- The employee earns less than $450 in a calendar month
- The employee is under 18 and works less than 30 hours per week
- The employee is a domestic or private worker (such as a cleaner or nanny), and works less than 30 hours per week
- Employees who opt out of receiving super – they must provide you with a SG Employer Shortfall Exemption Certificate
What happens to an employee’s insurances that are paid out of their superannuation contributions if I don’t pay their superannuation contributions or I pay these contributions late?
Late or unpaid super can affect your employee’s insurance cover they have in place within their super funds including life, TPD and income protection insurance. It is imperative that you pay employee’s superannuation contributions on time to ensure that you are not held liable for non-payment of insurance premiums.
If you have any further questions about paying superannuation please don’t hesitate to contact the team at HHH Partners.