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Superannuation | How to...

GETTING ON

TOP

OF SUPER

Image: Thinkstock

What you need to know about superannuation before you start your business

W

MICHAEL HUTTON head of wealth management at hlb mann Judd

hile there are any number of areas that need to be considered when setting up a franchise business, including business structure, legal and tax requirements, and hiring staff, one area that shouldn’t be overlooked right from the beginning is the superannuation obligations of business owners. For any business owner, there are two components to superannuation, both of which are governed by specific rules and regulations: • the business’s superannuation obligations to its employees • the business owner’s own superannuation entitlements.

employee superannuation Superannuation guaranteed contribution Businesses are required by law to pay superannuation contributions every quarter to its employees. This includes anyone aged between 18 and 69 years who is working on a full-time, part-time or casual basis, and earning more than $450 a month (before tax). The minimum amount to be paid (known as the superannuation guaranteed contribution, or SGC) is nine percent of each employee’s gross earnings. All SGC payments must be made to employees’ superannuation funds within 28 days of the end of each quarter. www.franChise.net.au

Super fund choice All employees have the right to choose which superannuation fund their contributions are paid into. Therefore, as soon as an employee joins the business, they should be asked to provide the details of which superannuation fund they wish to use, including account number, account name and tax file number. For those employees who don’t nominate a particular fund, business owners should nominate a ‘default’ superannuation fund (see below), and make the SGC into this fund on behalf of those employees. MySuper From 1 July this year, a new superannuation option known as MySuper will be introduced, which will be the compulsory default fund option for everyone who hasn’t chosen a specific fund or investment option. So while superannuation fund providers can continue to offer their own options, such as ‘balanced’ or ‘high growth’ funds, they must also offer a MySuper product if they wish to accept default contributions. Employers must use the MySuper option if they are making contributions to a default fund on behalf of employees who have not nominated another option. Penalties If employers don’t pay the SGC by the due date, don’t pay the full nine percent or don’t pay it into an may/Jun 2013 franChising | 121

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