Superannuation

Super is money you pay for your workers to provide for their retirements. If you have employees, you generally need to pay super guarantee contributions to your employees regardless of how much they are paid.

All employees are covered by the superannuation guarantee. It applies to full-time, part-time and casual workers.

The super guarantee (SG) is the minimum amount of super you must pay to your employees to avoid the super guarantee charge. The SG is currently 11.5% of your employee’s base earnings (ordinary time earnings), and is planned to progressively increase to 12% by 2025.

As an employer, you need to:

• offer eligible employees choice of super fund. From 1 November 2021, you may need to request ‘stapled super fund’ details from the Australian Taxation Office (ATO) where an employee doesn’t choose a super fund
• pay super contributions for eligible employees four times a year, by the quarterly due dates, or more frequently if required. Some contractors may also be entitled to super
• pay and report super electronically in a standard format, ensuring you meet SuperStream requirements
• pay super to complying super funds
• check if employees are eligible to choose their own super funds provide eligible employees with a Standard choice form
• advise employees of your employer nominated fund, also known as your default fund. Where employees do not nominate their choice, or until they do, pay their super guarantee into your default fund
• give the employee’s tax file number (TFN) to their super fund within 14 days of receiving their TFN declaration form. If you don't make contributions during this period, you can provide the TFN when you make the contributions
• keep records of super contribution payments and evidence that you offered a choice of super fund to eligible employees.

All employers must offer eligible employees a choice of super fund when they start. You’ll need to:

1. Identify new employees who are eligible to choose.
2. Provide eligible employees with a standard choice form.
3. Act on your employee's choice of super fund.

From 1 November 2021, if you have new employees start, you may have an extra step to take to comply with choice of fund rules if they don’t choose a super fund. You may now need to request their ‘stapled super fund’ details from the ATO.

A stapled super fund is an existing super account which is linked, or 'stapled', to an individual employee so that it follows them as they change jobs.

If you don't meet your choice of super fund obligations, additional penalties may apply.

The change aims to reduce account fees by stopping new super accounts from being opened every time an employee starts a new job.

Due dates for super contributions each quarter are:

• 28 January
• 28 April
• 28 July
• 28 October.

Where the due date falls on a weekend or public holiday, the due date is the next business day. If you don't make your superannuation contributions by these dates, you'll face penalties.

If you have employees, you must use SuperStream (the superannuation data and payment standard) to pay super. SuperStream makes it easier to make super contributions. For many employers, you’ll be able to make all your contributions in a single transaction (to multiple super funds).

Under SuperStream, you need to:

• send all super data electronically (such as employee details and the amount of super being paid)
• make contribution payments electronically
• link data and money with a unique payment reference number
• send data and payments on the same day.

Some options to help you meet the standard include:

• upgrading your software so that it complies with the standard
• using a service provider that can meet the standard for you
• getting advice from your super fund on how your business can meet the standard.

If you have employees, you need to report to the ATO using Single Touch Payroll (STP). Your STP-enabled software sends them your payroll information each time you pay your employees. Payroll information includes:

• salaries and wages
• pay as you go (PAYG) withholding
• superannuation.

If you’re a small business owner with 19 or fewer employees or have an annual turnover of less than $10 million, the Small Business Superannuation Clearing House (SBSCH) is a free service you can use to make your superannuation guarantee contributions.

The SBSCH makes it easy to pay all your super contributions online in one payment. It also gives you 21 days to pass on your employee’s choice of fund and is SuperStream compliant.

If you’re a sole trader or a partner in a partnership, you can choose whether you pay super to yourself. You don’t have to make super contributions to a super fund for yourself, however it is a good idea. You may want to consider super as a way of saving for your retirement.