Employers

How much you must pay

The Federal Government's Superannuation Guarantee (SG) legislation requires employers to pay a minimum level of superannuation for each of their employees. The current SG rate is 9%.

To work out the minimum amount of superannuation required for each employee, you multiply the SG percentage by the employee's ordinary times earnings.

Ordinary time earnings is the total of the employee's earnings for ordinary hours of work, over-award payments and shift loadings, bonuses and commissions, or as defined in the relevant award or industrial agreement.

Awards and industrial agreements

If there is an award or industrial agreement at your workplace, the amount of superannuation you have to pay may be affected. If the award or industrial agreement amount is higher than the required SG amount, you must pay the higher amount.

If you are unsure of award requirements, the relevant* State or Federal Government Department or Employer Association may be able to help you.

Who do you have to pay super for?

You must pay superannuation for employees if their gross salary and wages in any calendar month exceed the Federal Government's threshold, which is currently set at $450 per month.

The exceptions are for:

• Employees who are under 18 years of age and who work less than 30 hours per week; and
• Employees aged 70 or over.

Note: You may still have to pay super for earnings less than $450/month if an award or industrial agreement specifies it.

When you must pay

Tasplan recommends that you pay contributions monthly. Most employers find this the easiest way to manage their commitments and it helps protect employee's benefits, while also complying with SG Legislation.

The Australian Taxation Office (ATO) advises that under SG Legislation, payments of employer SG contributions are required to be made at least quarterly, and by the 28th day of the month following the end of each quarter. The following table provides an easy guide to when payments are required.

If you currently pay contributions monthly, you should continue to do so and you will comply with this part of the legislation, as well with the many awards that stipulate monthly contributions.

Choice of Super Fund

Many employees can choose which super fund they would liketheir super contributions paid to. As an employer, you need to identify which employees are eligible under the legislation, an industrial agreement, or relevant award.

For those employees who are eligible, the following steps apply:

1. Provide an ATO prescribed Standard Choice Form within 28 days of the date the employee starts work with you (the employer). This form is available from the ATO web site, or alternatively contact Tasplan. It is permissible to provide a variation of this form as long as it includes the same information.

2. You need to include details of your default employer fund in Part A of this form. This is your instruction to the employee that, unless they provide you with details of an alternative fund, you will make contributions to the fund nominated.

3. If an employee returns a Standard Choice Form noting details of their preferred fund, you have two months to arrange to pay contributions into that fund providing all other requirements have been met. It is possible that an employee’s advice about choice will come in the form of a pre-completed form provided by their preferred fund. These forms will generally feature a statement from that Fund that it meets all choice requirements.

What about personal contributions from your employees?

Under superannuation legislation, employees' personal contributions deducted from salary or wages must be forwarded to a complying superannuation fund no later than 28 days after the end of the month in which the contributions were deducted.

Reporting Obligations for Employers

Employers no longer have an obligation to provide their employees with a quarterly statement of superannuation contributions made on their behalf. There is no requirement for employers to cease current reporting. They may if they wish continue the provision of regular super contribution reports. It should be noted that there may in fact be an ongoing requirement in some awards or Australian workplace legislation to report super on pay slips. There may be advantages in providing super reporting in terms of employee relationships and in minimising employee enquiries about contributions made for them. Tasplan will continue to issue half yearly statements listing all contributions received

Tax File Number obligations for employers

Legislation requires superannuation funds to collect members' Tax File Numbers (TFNs). It is in an employee's best interest to provide their TFN as it may save them having to pay an additional 15% Federal Government tax on their superannuation contributions (the surcharge tax). TFN legislation has several implications for employers. The ATO's Employment Declaration Form asks employees to authorise their employer to give the TFN to their superannuation fund. If an employee answers "yes" to give you this authority, you must do one of the following:

• Give the TFN to Tasplan either by phone, fax or letter within 14 days of the employee authorising you to do so; or
• Notification within the employees pay slip of payments already made
• Send the TFN to Tasplan with the first SG contribution made for that employee.

If you fail to comply with Government's "obligations for employers", the ATO may impose severe penalties, up to $3,000 for each offence.

For helpful information and guidance to help you through Government's legislation, please phone our Client Service Managers on Freecall 1800 005 166.

Did you know?

*Many awards and industrial agreements already require employers to pay their SG contributions monthly.

If you are unsure of award requirements, we suggest you contact Workplace Standards Tasmania Helpline, 1300 366 322 (Inside Tasmania), 03 6233 7657 (Outside Tasmania), or check out their web site. NSW employers can , contact the Dept. of Commerce, Office of Industrial Relations Helpline, 131 628 or visit the NSW Department of Commerce website or the NSW Labor Council website.