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- 1. Review eligibility for super contributions
- 2. Get your super contributions right
- 3. Collect information on your super contributions
- 4. Pay your contributions by the deadline
- 5. Make contributions to the right super funds
- 6. Report and pay your contributions electronically
- 7. Maintain accurate records about your contributions and reporting
If you’re a busy employer, it’s hard to remember everything you need to do to meet all your tax and business obligations. Paying your employee’s super can be an easy one to forget.
To make things a little easier, here’s a quick list of all the ‘to-do’ items when it comes to your obligations and the reports you need to file to ensure you stay up-to-date with your employees’ super.
And remember, you could face substantial penalties from the ATO if you don’t do the right thing or meet the quarterly payment and reporting deadlines.
Click the download button for a version that you can print and tick off each task.
1. Review eligibility for super contributions
- Check you are making super contributions for all your employees earning $450 or more (before-tax) in a calendar month.
- Check if any of your employees aged under 18 are eligible for SG contributions. An employee aged under 18 who works more than 30 hours per week is eligible to receive SG contributions on top of their wages.
- Ensure you are making SG contributions for any company directors and family members working in your business.
- Check if any of your contractors are considered employees under super law, as they may be eligible for SG payments, even if they quote an Australian Business Number (ABN).
- Ensure you have documentation in place noting how and on what basis you determined a worker was a contractor in case of a future audit by the ATO.
2. Get your super contributions right
- Ensure you are calculating your SG contributions at the correct rate (9.5% of an employee’s ordinary time earnings (OTE) in 2020/21). This rate is currently legislated to increase to 10% on 1 July 2021.
- Review the award each employee is working under to ensure you meet all the super requirements. Some awards require super contributions to be higher than 9.5%.
- Check the OTE base amount for your SG calculations includes employees’ regular wages plus any shift loadings, commissions, paid leave and the necessary allowances.
- Ensure your OTE base amount does not include overtime (other than regularly rostered overtime), fully expended expense allowances, expense reimbursements, benefits subject to FBT, jury top-up and parental leave payments and termination payments for accrued annual leave or long-service leave.
- Check the quarterly Maximum Super Contributions Base for any high-income employees.
- Check whether an employee with several jobs has provided you with an Employer SG Shortfall Exemption Certificate releasing you from your SG obligations.
- Verify all your calculations to ensure you are paying the right SG amount for the quarter for each employee.
- Maintain detailed records of how you calculated your quarterly SG contribution amounts.
3. Collect information on your super contributions
- Ensure you have paperwork covering all aspects of your employees’ eligibility for super contributions (including SG, salary sacrifice and personal contributions).
- Ensure new employees have been given a Standard Choice Form within 28 days of starting employment with you.
- Check you have provided existing employees with a Standard Choice Form within 28 days of receiving a request for one.
- Ensure you don’t influence an employee’s choice of fund or provide anything other than factual information about your business’ default fund.
- Warn new employees that have not completed a Standard Choice Form. You are required to pay SG contributions into the business’ default super fund if they do not make a choice.
- Ensure you send the TFN to the employee’s super fund no later than the day on which you make the first contribution for them, or within 14 days of receiving the TFN if it’s not available at the time of the first contribution.
4. Pay your contributions by the deadline
- Ensure you know the contribution deadlines for your SG contributions and reporting.
- Mark the deadlines on the calendar. Contributions must be made at least four times a year (deadlines are 28 October, 28 January, 28 April and 28 July), but if you become a participating employer some super funds require monthly contributions.
- Check the processing time needed by your clearing house. SG contributions are considered paid when they are received by the super fund, not when you pay them.
- Consider paying compulsory SG contributions whenever you pay your employees to smooth the cash flow impact.
- Ensure you make payments into an employee’s chosen super fund within two months of receiving a valid fund choice.
- Pay SG contributions before the deadline to ensure you can claim a tax deduction against your business income.
- Avoid paying the Super Guarantee Charge (which is not tax deductible), by making your contributions on time.
5. Make contributions to the right super funds
- Collect the ABN of each employee’s chosen super fund and its unique superannuation identifier (USI).
- For employees with an SMSF, collect the TFN and ABN of the SMSF, together with its bank account details and electronic service address.
- Avoid making contributions until your employee has joined their super fund.
- Ensure you have made an SG contribution into your business’ default super fund prior to the quarterly deadline if you are still waiting for a completed Standard Choice Form.
- Ensure you are making SG contributions to a complying super fund or your contributions won’t be counted towards meeting your SG obligations.
6. Report and pay your contributions electronically
- Ensure your super payments and reporting meets the ATO’s rules for SG contributions.
- Consider making SG contributions via SuperStream, as your payment and data are sent electronically in the required format.
- Use the SuperStream decision tool to help make the right choice for your business.
- Pay your super contributions via ETF or BPAY if you choose not to use SuperStream.
- Check whether your Single Touch Payroll (STP) system is collecting and reporting your super payments.
- Confirm your contribution information is correct and complete before sending it to the clearing house or super fund.
- Send both your payment and data to SuperStream on the same day to help super funds reconcile your payment and information.
- Consider using the free Small Business Super Clearing House (SBSCH) if you are eligible, as your SG obligations are satisfied when the SBSCH accepts your payment.
7. Maintain accurate records about your contributions and reporting
- Establish an effective recordkeeping system to collect all the necessary information about your super payments and reporting.
- Ensure you keep records to show that you have met your SG obligations.
- Check you are not including super contributions in your employees’ annual payment summary as reportable fringe benefits.
- Verify you hold a letter of compliance from each super fund that it is a complying super fund.
- Keep the necessary documentation to support your tax deduction claims for SG contributions.
- Maintain records demonstrating that you offered eligible employees the choice of super fund.
- Keep records showing contributions were made to the employee’s chosen super fund or the business’ default fund. Under the Fair Work Act you are obliged to include super contribution amounts on employee payslips.
- Retain records for five years showing how much super you paid and how it was calculated.
- Ensure you have written records and an effective arrangement in place if you make salary sacrifice contributions for an employee.
- Retain your salary sacrifice records for five years.
- Confirm you hold all the necessary information about salary sacrifice payments so it can be included on the employee’s annual payment summary as Reportable Employer Super Contributions (RESC).
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