When providing super to your employees, there is some key super legislation you should consider:
Changes are coming..
New data and payment standards for employers are on their way. The data standards are designed to make the processing and submitting of superannuation payments easier, cheaper and faster.
This is achieved by:
- Implementing a common data standard.
- Using new standardised technology to improve efficiencies.
For more information on the data and payment standards click here.
How much super you need to pay
Superannuation Gurantee (SG) legislation requires employers to pay a minimum level of super for each employee at least quarterly.
The amount you pay is usually a percentage of each employee's average weekly or quarterly ordinary time earnings. The SG rate is currently set at 9.5% and will remain at this rate until 1 July 2021, when it will increase to 10%.
If your employee is covered by an Award or industrial agreement that specifies a higher amount, then you are obligated to pay the higher amount.
See our 'How to make contributions' page for information on how you can contribute to WA Super.
Who you need to pay SG contributions to
Generally, you have to pay super for an employee if they are:
- Over 18 years of age*;
- Paid more than $450 (before-tax) in any calendar month;
- Are working full-time, part-time or on a casual basis.
*If an employee is under the age of 18, but paid more than $450 (before-tax) in salary or wages in a calendar month and works full-time, part-time or on a casual basis for more than 30 hours in a week you will also need to pay them SG.
The ATO has developed a tool to help you work out if you need to pay super for your employees. You can access the tool on their website at www.ato.gov.au/employersuper.
When you need to make contributions by
You are required to make SG contributions on behalf of your employees at least quartely. The cut-off dates for each quarter are as follows:
Due date for Contributions
1 July - 30 September
1 October - 31 December
1 January - 31 March
1 April - 30 June
Who is eligible to choose a super fund
Most employees can choose which super fund will receive their employer SG contributions, and as an employer you are obligated to fulfil this choice.
More information on who is and isn't eligible to choose a super fund can be found on the Australian Tax Offices website.
How to fulfil your super choice obligations
You need to provide a 'Standard Choice Form' to all new eligible employees within 28 days from the day they start working for you.
You also have to provide a 'Standard Choice Form' within 28 days if any of the following applies:
- An exisiting employee asks you for one - You only have to fulfil this once every twelve months
- If you are unable to contribute to an employee's chosen fund or it is no longer a complying fund
- You change your employer-nominated default fund
Once an eligible employee chooses a super fund, you have two months to arrange to pay contributions into that fund.
More information on your super choice obligations can be found on the Australian Tax Offices website.
Paying non SG super contributions
If a member wishes to make salary sacrifice or personal contributions into their super account they need to meet certain criteria.
To make and receive after-tax contributions (i.e. personal contributions) a member must:
- Meet a work test^
- Be under the age of 75; and
- Provide their TFN to their super fund^^
To make and receive before-tax contributions (i.e. salary sacrifice contributions) the member must:
- Meet a work test^; and
- Be under the age of 75
^ Work test means: For members aged 65 or more at the time of contribution, the member must have been gainfully employed for at least 40 hours in no more than 30 consecutive days in a financial year. The work test must be met prior to the contribution being made.
^^ If we do not have a members tax file number, we can still accept employer contributions and salary sacrifice, however, those contributions will be subjected to a further 32% tax which means that these concessional contributions will effectively be taxed at 47%.
For more information visit the Australian Tax Offices website.