We have found over the last 12 months the ATO have increased their audit activity with employers who have not met their Superannuation obligations for employees (including Directors Superannuation).
As quick reminder of who you must pay Superannuation Guarantee contributions on behalf of:
– An employee is eligible for super if they are 18 years or over (those under 18 must work more than 30 hours per week before becoming eligible);
– And they are paid $450 (before tax) or more in a calendar month.
As an employer, the minimum super you must pay is 9.5% (for the 2014/15 year) of each employees ‘ordinary time earnings’, ie their ordinary hours of work. Please note a common mistake we see is Superannuation not being paid on performance bonuses and commissions. If you are unsure what employee payments must have superannuation guarantee paid on them below is a link to a checklist on the ATO website.
When to pay
Payments must be made at least four times a year by the quarterly due dates, which are 28 October, 28 January, 28 April and 28 July.
If you miss any of the above payments, or you underpay the minimum super amount, you must lodge a Superannuation Guarantee Charge Statement with the ATO. Nominal interest will continue to accrue at 10% until the statement is lodged, this includes if the super was paid in full, but late. Also if you miss the payment you will then be required to pay SG on overtime which may have previously been exempt.
Keeping accurate records
Employers must keep records that show the amount of super paid for each employee and how it was calculated, that eligible employees were offered a choice of super fund, and how reportable employer super contributions were calculated.
If you would like to discuss superannuation guarantee audits, or if you think your business could be a target, please contact our office.