Below we’ve provided you with a brief overview of your superannuation obligations as an employer.
Superannuation Guarantee (SG) Contributions
By law, as an employer, you’re required to make SG contributions on behalf of employees who are:
- Aged 18 years and over who receive a wage of $450 or more a month
- Under the age of 18 and work 30 hours or more a week and earn $450 or more (before-tax) in a month
- Employed on a full-time basis, part-time or casual basis
SG contributions need to be directed to the relevant super fund by the set date each quarter. Some workplace agreements may require monthly or more regular payment.
SG contributions are set to increase each year up to 12% of Ordinary Time Earnings on 1 July 2025. This increase will be gradual as shown in the table below:
|1 July 2013||9.25%|
|1 July 2014||9.50%|
|1 July 2015||9.50%|
|1 July 2016||9.50%|
|1 July 2017||9.50%|
|1 July 2018||9.50%|
|1 July 2019||9.50%|
|1 July 2020||9.50%|
|1 July 2021||10.00%|
|1 July 2022||10.50%|
|1 July 2023||11.00%|
|1 July 2024||11.50%|
|1 July 2025||12.00%|
Choice of Fund
Some employees can choose the superannuation fund into which their SG contributions are paid. Employees that fall under certain awards or industrial agreements may have their super fund specified and may not be eligible for Choice of Fund.
For employees who don’t nominate a fund of choice, you need to select a default fund for SG contributions that offers a minimum level of insurance cover. Most industrial awards have a list of default funds you can choose from.
Employers have to provide new employees with a Standard Choice Form within 28 days of starting employment. Once an employee notifies you of his or her choice of fund, you must act on this within two months. There is no limit on the number of times an employee can ask you to change the fund into which their contributions are paid. However, you’re only required to act on the employee’s request once every 12 months.
You should keep records for at least five years of the following:
- Employees who do not have to be offered a choice of super fund
- Evidence the ‘Standard Choice Form’ has been given to all eligible employees
- Confirmation that you’ve acted on your employees’ choice of super fund
- Confirmation that the default fund chosen meets the minimum death insurance requirements set out in the legislation
Penalties apply if you don’t meet these obligations.
MySuper is one of the key components in the Government’s superannuation system reforms, designed to introduce a set of product features that will be standard across the industry. Product features include a single investment option and basic Death and Total & Permanent Disability insurance.
From 1 January 2014, for employees deemed to be 'MySuper' members in a fund, employers will be required to make SG contributions into a fund that provides a MySuper product.
SuperStream is one of the key components in the Government’s superannuation system reforms, designed to introduce new data standards that make processing super payments easier. The new standards aim to reduce the time it takes to process rollovers and contributions, provide reliable electronic transacting and lower transaction costs over time.
With the introduction of the SuperStream standards, you’ll need to make super contributions electronically:
- By 1 July 2015, if you have 20 or more employees, or *
- By 1 July 2016, if you have 19 or fewer employees.
* The ATO has extended its compliance flexibility and will not be taking compliance action against employees who miss the 30 June deadline. However they expect that employees are putting plans in place now and come up to speed by 31 October 2015.
Providing Tax File Numbers (TFN)
All employers have a responsibility to record an employees’ Tax File Number (TFN) if provided. You must provide the employee's TFN to their super fund within 14 days of receiving the TFN.
It’s important you provide your employee’s TFN to their super fund so that they are not liable for additional tax, and they don’t miss out on any government benefits they may be entitled to, like the co-contribution.
For more information about Tax File Numbers visit www.ato.gov.au
Reportable Employer Superannuation Contributions (RESCs)
For any employees taking advantage of government benefits like the co-contribution, family tax benefits and child care benefits, you need to report certain super payments known as RESCs you make on their behalf.
Generally, you need to list the following contributions on an employee’s PAYG Payment Summary as RESCs:
- any employer salary sacrifice contributions or other before-tax contributions that an employee has the capacity to influence, paid into their super fund over the minimum SG contribution, and
- any additional employer contributions that your employee has specifically negotiated with you.
Once the contributions are reported, the ATO and/or Centrelink will use these amounts to work out the various Government benefits your employees have applied for or are entitled to.