Paying your employees superannuation is an integral part of being an employer. Superannuation provides income for your workers in retirement and it is your legal obligation to make sure you are paying your eligible employees the right amount, on time, to the right place and also in the right way. The ATO has also introduced a few schemes to help employers meet their super obligations due to financial strain caused by COVID-19.
Your super obligations are summarised in the following:
- Check the eligibility of all your employees (some contractors or freelancers may be entitled to superannuation payments).
- Pay your eligible employees 9.5% of their ordinary time earnings.
- Super payments must be made at a quarterly minimum (employers who do not pay their superannuation on time may need to pay a superannuation guarantee charge).
- Pay super into your worker’s fund of choice.
- Keep evidence to show that you have met your super obligations as an employer.
The ATO also recommends paying the SuperStream way (both payments and data are sent electronically in a standard format) and streamlining your payment process with Single Touch Payroll, although these measures are not mandatory.
While the usual obligations apply, the ATO has also introduced assistance schemes in response to COVID-19 for employers. The superannuation guarantee amnesty, in particular, will provide you with arrangements which can adjust your payment terms and amounts relative to your financial circumstances as well as extend your payment plan to beyond 7 September 2020, provided you apply to participate in the amnesty by that date.
Applying for superannuation guarantee amnesty also means having any refunds returned to you as quickly as possible and being notified of any eligible income tax deductions you can claim on your contributions to employee super funds. However, if you are unable to maintain super payments despite being granted SG amnesty, you will be disqualified from the program. This disqualification will only apply to any unpaid quarters and you will need to pay a $20 per employee component for re-application of any unpaid quarters.
For updates in the event of more changes to super obligations and requirements, visit the ATO Super website or APRA-regulated funds page for more information.