“Paying super is certainly a topic that generates quite a bit of community interest. The ATO is committed to detecting the non-payment of super. We want to work with employers to help them get their super obligations right.” John Ford | Assistant Commissioner for Superannuation, Engagement and Assurance | Australian Taxation Office
Super is everyone’s business. Regardless of whether you’re a franchisee or franchisor, you need to understand your super obligations. A franchisor can be held responsible if they know a franchisee is not getting their super right. Employees rely on super to fund their retirement. For most people, super begins when they start working – full time, part time, or casually – and retirement can seem a long way off. So, put some time aside for super; by doing so you’ll not only take care of your most valuable asset, you’ll minimise risk to your brand. Here are six simple steps to help you get it right.
1 Check you’re paying for the right people You need to pay super for all of your eligible employees. Generally, an employee is eligible for super if they are 18 years of age and get paid at least $450 before tax a month.
and a contractor: ato.gov.au/calc_ employeeorcontractordecisiontool If you send an Australian employee to work temporarily in another country, you must continue to pay super contributions in Australia for them. The other country may require you or your employee to pay super (or equivalent) there as well. Australia has bilateral agreements with some countries so you don’t have to pay super twice – provided you continue to pay compulsory super contributions for the employee in Australia.
2 Check you’re paying the right amount Currently you need to pay 9.5% of your employee’s ordinary time earnings (OTE) into super. Your employee’s OTE will be the normal hours they work, including over-award payments, commissions, shift loading, allowances and bonuses, unless their hours are specified in an award or agreement. The ATO’s checklist at ato.gov.au/OTE will help you identify what payments are
considered salary and wages for super purposes. With your agreement, an employee can ‘sacrifice’ part of their salary or wages into super. If they choose to do this, you make super contributions to their fund on their behalf. The main benefit for your employee is that this reduces their assessable income and the amount of PAYG tax they have to pay. Instead the contributions are taxed in the super fund at the concessional rate of 15%.
3 Check you’re paying on time You need to pay super at least quarterly some super funds, awards or agreements may require more frequent payments. The payment due dates are 28 October, 28 January, 28 April and 28 July. When a due date falls on a weekend or public holiday, you can make the payment the next working day. If you don’t pay on time and to the correct fund you will have to lodge a ‘superannuation guarantee charge statement’ form and then pay the charge liability. You can find the form at ato.gov. au/sgccalculator
Claiming a tax deduction To claim a deduction for super contributions, your employer contributions must have been received by the employees’ super funds by 30 June. If your payments are received on or after 1 July, you can claim the deduction for the payment the following financial year.
Employees under 18 must work for more than 30 hours per week to qualify. You have to pay super for some contractors, even if they quote an Australian business number (ABN). If you’re a franchisee and employ an individual and pay them (greater than 50%) for their labour and they’re unable to delegate the work, then you must pay super. If your contract is with someone other than the person actually providing the labour, such as a company or trust, you don’t have to pay super. The ATO’s employee/contractor decision tool will help you determine the difference between an employee
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