Business - Superannuation - What you need to know as an employer

Your employer obligations

Running a business can be hard work. There seems to be a never-ending list of things that you're responsible for. Let us help you understand your super obligations with some key information you need to know. Here you'll find details about what you’re required to pay your employees, as well as important information about cut-off dates, how often you need to contribute, Super Choice rules and penalties.

Super Guarantee (SG)
Super Guarantee (SG) is the compulsory super contribution you must pay to your employees. Currently the percentage for SG is 9.5% of your employee’s earnings for their ordinary hours of work (including commissions, shift loadings, allowances).

Do I have to pay SG to all employees?

You need to pay super to an employee if they are:

18 years of age or above and you pay them $450 or more in salary or wages in a month - this includes full time, part-time and casual workers
Under 18 years of age but they meet the above conditions and work at least 30 hours per week
Contractors (depending on the terms of their engagement)
Temporary residents of Australia

If you’re self-employed, it’s your choice if you want to pay yourself super.

How often do I need to pay super?

You should:

Pay quarterly and by the cut-off dates set by the ATO (see the table below) to avoid any penalties
Contribute regularly to ensure your employees’ accounts will cover any insurance premiums payable - otherwise their insurance may lapse
Pay any withheld amounts from your employee’s earnings (eg. Salary Sacrifice) within 28 days of the end of the month in which those amounts were earned

The table below are the due dates set by the ATO:

Quarter	Due date for payment	Due date to lodge SG statement with the ATO
July-September	28 October	29 November
October-December	28 January	28 February
January-March	28 April	28 May
April-June	28 July	28 August

If the due date falls on a weekend, you have until the next business day. The ATO can’t extend these due dates.

Which super fund should I choose?

You can choose a super fund for your employees and offer your choice as their super fund. However most employees can make their own choice, this is known as Choice of Fund. An employer must provide an employee with a Choice form within 28 days of the employee starting employment.

Some exceptions do exist. A common one is if employees are covered by a certain type of industrial agreement. But you should speak to the ATO or get legal advice before relying on any of these exceptions.

If your employee decides not to make a choice, or if their choice is invalid (e.g. if their nominated account is closed or non-complying), you can open up an Essential Super account for them. Simply visit commbank.com.au/essentialsuperbusiness or any CommBank branch and we can set up accounts for your employees.

What are the penalties?

If you don’t pay super to your employees by the ATO due dates, you have to pay an SG charge by the ATO. The SG charge (SGC) is equal to:

The standard SG rate, plus
10% interest on the outstanding amount of super, plus
An administration charge of $20 per employee

This SGC is not tax deductible. Some contributions paid after the due dates may be offset against the SGC payable. And if you don’t pay super to your employee’s chosen fund or offer eligible employees a choice, extra charges may apply. Contributions paid into the wrong fund are not counted by the ATO when they assess if you have met your obligations as an employer.

What is MySuper?

Recently the government announced MySuper as part of its Stronger Super package aimed at improving super for members. MySuper is a new low cost and simple superannuation product that will replace existing default funds by 1 January 2014.

From 1 Jan 2014, if your employee does not nominate their own super fund, you must contribute their super into a MySuper account. The good news is that Essential Super is a MySuper compliant product. It’s simple, cost effective, provides minimum insurance and has straightforward investment options.

Useful tools

Need more help? You can visit the Super Future website at www.superfuture.gov.au

This website is a government initiative and is a valuable resource for both you and your employees. The site provides useful information and tools, including: