Published on May 13, 2019
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The end of the financial year is fast approaching and it’s time to make sure you have all your ducks in a row when it comes to employee superannuation.
In recent months there has been an increase in reports in the media of employers not fulfilling their financial obligations to their staff. This is both in terms of underpayment of wages, and also non-payment of their superannuation guarantee (SG) contributions.
Analysis of 2016-17 ATO data conducted by former Treasury official Phil Gallagher has found that 90,000 workers have been short-changed on superannuation since 2013-14, with unpaid entitlements totalling $5.94 billion.
Due to the effect of compound interest, delays or non-payment of these quarterly payments can quickly add up to a major loss of earnings in an employee’s super account.
Payment rates and penalties
Employers are required to pay 9.5% of an employee’s ordinary earnings into a super account nominated by the employee. Failure to do so will see a range of penalties applied by the ATO.
An amnesty was proposed for employers who found themselves in breach of their SG obligations. However, although the draft legislation was submitted in May 2018, the proposed Superannuation Guarantee Amnesty bill was not enacted when Parliament concluded on 22 February 2019.
Do I need to pay super for casuals?
Some employers may be under the misconception that they don’t need to pay a super contribution for casual employees. Basically, you need to pay super for anyone over 18 who earns more than $450 per calendar month. And, anyone under 18 that works over 30 hours a week. This applies to full-time, part-time and casual employees. It also includes temporary residents.
Currently super contributions must be made at least quarterly (for dates see table below).
Due dates for employers to pay SG contributions
|Contribution quarter||Quarterly period||Payment due date to super fund|
|1||1 July – 30 Sept||28 October|
|2||1 Oct – 31 Dec||28 January|
|3||1 Jan – 31 March||28 April|
|4||1 April – 30 June||28 July|
Small businesses often have cash flow issues, and there have been calls to look at changing the payment timetable for super contributions to be in-line with the pay period of wages and salaries instead of quarterly. The thinking behind this is that smaller regular payments of super may be easier for many small businesses to manage than the much larger quarterly payments. Employers are currently able to do this voluntarily.
Don’t forget the introduction of STP for small businesses on July 1
Last year the Australian Taxation Office (ATO) introduced a single touch payroll (STP) system for businesses with more than 19 employees. Which means that they have been required to report their employees’ wages/salaries, tax and super to the Australian Taxation Office each pay period.
From July 1, 2019 this will now be extended to include businesses with 19 or fewer employees. Once the changeover has been made it will also mean the end of group certificates.
Talk to your accountant. It may be a good opportunity to voluntarily pay your super contributions each pay period instead of quarterly when you change over to the STP reporting system.