Are you paying super correctly?

Are you paying super correctly?

Employers have an obligation to pay superannuation to eligible workers – not paying super guarantee (SG) can result in penalties and loss of tax incentives such as tax deductions.

Employees who earn $450 or more before tax in a calendar month are entitled to super guarantee (SG). Contract workers and employees under 18 have special conditions. Some contractors may still be eligible for SG, even if they have their own ABN.

Super guarantee requires employers to pay a minimum 9.5 per cent of ordinary time earnings (OTE). It is important for employers to check awards as some have a higher rate and different conditions.

Super contributions are tax deductible if payments are made to an employee’s super fund in the financial year they are paid. Super contributions are considered paid when they are received by the fund.

The deadlines are quarterly for most funds, i.e. 28 July, 28 October, 28 January, 28 April. However, some funds require monthly payments, so it is important to check with each fund.

Employers are required to keep records for five years showing how much SG was paid and how it was calculated. Records must also show you offered each employee a choice of super fund.

Failing to comply and/or deliberately doing the wrong thing can result in penalties for employers.


If you believe the matters discussed above are relevant to your business, please contact Darren Smith of our office to discuss further.

Darren is a Chartered Accountant with extensive experience, including working in the big 4 and medium sized firms before becoming a partner of a city based firm in 2000.

He has gained much experience and has extensive knowledge in providing business and taxation advice, superannuation planning, negotiation of sales and acquisitions of businesses and property development. His client base covers a wide range of industry groups.

Darren works with business owners to grow their businesses and create personal wealth within and outside of their business.

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