We have noticed a growing trend in employers making mistakes in determining their Super Guarantee (“SG”) Obligations.
It may be time for you to conduct a Superannuation Guarantee Health Check.
- SG contributions need to be made on a quarterly basis no later than the 28th of the month following the day after the end of each quarter. If you are late the law is unforgiving. There is a range of penalties combined with the real sting at the end tail – all shortfall contributions made late are no longer deductible. Ouch!
Ensure you make contributions on time. The best practice is to make the SG payments at the same time as your monthly payroll run.
- The current SG rate is 9.5%.
- The rate is applied to “ordinary times earnings”.
Overtime and Fringe Benefits are excluded.
Bonuses and commissions are included.
Check your payroll software to ensure this rate has been updated and is calculating on the correct base.
- Payments made outside of payroll function may get overlooked.
- The best example is some contractors may fall within the SG obligations of an employer albeit they are not employees.
- If the circumstances are that the working arrangements are wholly or principally for the labour of an individual, even if they are called a contractor, it may be likely that SG is payable on such payments.
Check other workers not run through your payroll to ensure no SG obligations are being overlooked.
- Are you paying too much SG contributions?
- There is a ceiling amount where any salary paid in excess of does not attract SG.
- The maximum contributions base for 2015/2016 for each quarter is $50,810 per quarter.
Introduce “exception reports” in your payroll function to identify these limits.
- If you qualify as a small business, you have until 30 June 2016 to ensure you comply with the new data and payment standards under “Super Stream”.
- Review your systems to ensure you are able to remit and make payments in an electronic format that complies with “Super Stream”.
- If you have 19 or fewer employees you may wish to use the ATO’s online “Small Business Superannuation Clearing House” which makes the administration of contributing SG easier.
After following the above checks, you should be heading towards a ‘super’ clean bill of health.