It’s not easy to start a new business. What is even harder is learning all the legal requirements, not to mention an employer’s responsibilities with regards to salaries, benefits, and superannuation, which is one of major payments for employees.
New employers may find it difficult to understand superannuation. However, it is quite simple; all you need to do is understand some core concepts:
Keep comprehensive records
Your records need to include the name of the super funds where your super contributions are being sent, how much you are paying for each fund, the date of payment, and the period covered by the payment.
In case a worker’s employment contract is terminated, the records must detail the manner by which the termination was executed, whether by consent, by notice, etc.
Picking the super fund
Do employees have to right to pick their super fund? Employees are not permitted to pick their own under some awards and agreements.
Employees who want to pick their own fund must be provided by a standard choice form by their employers. The ATO website offers more information about standard choice forms.
Beginning 1 July 2015, a new standard called SuperStream will become mandatory for employers. It simplifies the process of reporting superannuation contributions to the government, as well as saves a lot of time for employers.
The Superannuation rate
There have been quite a few changes in the superannuation rate over the last several years. But here are the important numbers:
- 1 July 2015: 9.5%
- 1 July 2021: 10%
- 1 July 2023: 11%
- 1 July 2024: 11.5%
- 1 July 2025: 12%
Contributions are paid to employers every quarter. Each quarterly period has its corresponding due date. Here they are:
- Quarter 1, 1 July – 30 September: Due 28 October
- Quarter 2, 1 October – 31 December: Due 28 January
- Quarter 3, 1 January – 31 March: Due 28 April
- Quarter 4, 1 April – 30 June: Due 28 July
Make sure your business is always updated with tax changes, including the new SuperStream system, by subscribing or upgrading to MYOB software.
If you are just starting a business and know little about superannuation, meet with one of our experts who can guide you through the process. If you want to know more about super and your obligations as an employer, contact PJS Accountants.