Employers must pay a minimum 9% superannuation contributions to their employees based on their ‘ordinary time earnings’ and this must be paid into a complying super fund at least four times a year. The superannuation guarantee contributions for the April to June quarter of 2010 must be paid by the 28th July.
To claim the superannuation guarantee payment as a tax deduction for the current financial year ending 30 June 2011 the payments must be made to the complying super funds by the 30th June 2011. Any payment that is received after this date can not be claimed as a tax deduction until the end of the following financial year. However, no tax deduction is available where an employer is required to pay the Superannuation Guarantee Charge.
If you’re an employer, you need to check that you may have to pay super for contractors – even if the contractor quotes an Australian business number (ABN). Employers need to pay super contributions for contractors they pay under a contract that is wholly or principally for the contractor’s labour, even if the contractor quotes their ABN. This is because they are considered employees under super guarantee law.
The total superannuation guarantee contributions paid must also be disclosed on an employee payment summary.
Employees earning less than $450 per month and employees aged 70 and over are exempt from receiving Superannuation Guarantee. Workers are not allowed to negotiate with their employers to get a salary payment instead of compulsory superannuation contributions.
The government will match superannuation co-contributions made by employees or sole traders directly at 100% up to a maximum of $1,00 provided the income is at $31,920 or lower, the cut off for the co-contribution is when the income reaches $61,920 or higher. The payment must also be paid into (and reach the Super fund bank account) no later than the 30 June. This applies to both the 2010-11 and 2011-12 income years.
If you fail to meet your superannuation obligations you must lodge a superannuation guarantee charge statement (NAT9599) and pay the superannuation guarantee charge, plus interest plus and administration fee.
For more information regarding superannuation visit the ATO website on www.ato.gov.au/super.