As part of our monthly blog post for Shoestring, we write about the superannuation requirements that employers need to meet for their team members.
The key superannuation requirements that employers have to meet are as follows:
When it comes to superannuation contributions, you are required to pay contributions for employees if they are aged 18 years + and if they earn at least $450 or more in gross wages in a month.
A common mistake we see startups make is that they assume that they are not required to make superannuation guarantee contribution payments for contractors. If an individual is paid mainly for their labour for hours worked under a contract, then you will have to pay contributions for them, irrespective of whether they are a contractor or an employee.
The current rate of superannuation is 9.25% and is scheduled to change to 9.5% from 1 July 2014.
This rate of superannuation must be applied to the Ordinary Time earnings of your employees. This includes payment for your employees’ ordinary hours and whilst it includes commissions and performance based bonuses, allowances and shift-loadings; it does not include overtime payments.
Superannuation guarantee contribution payments for your team need to be paid by the 28th day of the month following end-of-quarter. i.e. for the June quarter, payment of superannuation payments is due 28th July.
Apart from the proposed change in superannuation rates, the Government has confirmed that superannuation contributions must be paid electronically by employers into the future. The new system will be compulsory from 1 July 2015 for businesses with less than 20 employees.
Under the new ruling, superannuation payments must be made using a single Electronic Funds Transfer (EFT) to a registered superannuation clearing house. Many accounting software providers offer this function (such as Xero and QuickBooks Online). Alternatively, if you have less than 20 employees you can register to use the ATO’s Superannuation Clearing House.
You can read more in the article on Shoestring here