Superannuation in Australia: 5 Things Employers Should Know

Superannuation in Australia is an obligation every good employer knows. Recently, the Australian Taxation Office (ATO) has made paying these obligations easier via the introduction of the Single Touch Payroll (STP) reporting system.

The STP has made it possible for ATO to know in real-time if you’re behind with super payments so they can collect penalty from you. The best way to avoid penalty, of course, is to pay your super obligations on time.

To always be in the good graces of the tax man, here are other things worth remembering when it comes to superannuation in Australia.


1. The ATO has the power to collect super

The ATO has the power to direct employers to pay unpaid superannuation to their employees. Failure to comply can result in a fine of up to $10,500 or 12 months imprisonment. 

If you fail to comply, the ATO will collect the super on behalf of employees. Missed super payments becomes payable to the ATO as Superannuation Guarantee Charge (SGC). 

The ATO may also direct business owners to take educational courses about their obligations to pay superannuation in Australia.


2. The ATO may issue a Director Penalty Notice

Employers who fail to pay the SGC may be issued the Director Penalty Notice (DPN). A DPN will make the director or owner of a company personally liable for SGC.A DPN may also be issued if you fail to pay the Pay-As-You-Go (PAYG) withholding tax to the ATO. 

You’ll have 21 days to comply and it starts on the day the notice is dated. After which, there is no way to avoid personal liability for unpaid taxes or superannuation in Australia. If you’ve received a DPN, contact us at Sphere Accountants & Advisorsand we’ll do our best to help protect you from personal liability.


3. Employees aged 18 and up with at least $450 before tax salary per month are eligible for super

Whether full-time, part-time or casual, if you’re paying $450 or more to an adult employee, those employees are qualified to receive super contributions. An employee under 18 years of age may qualify if he/she works for more than 30 hours per week.  


4. You have to pay super for your employees at least four times a year

Employees super contributions are calculated based on their income and they are calculated from the day the employee start with you. Payments must be made at least four times a year, by the quarterly due dates.

Superannuation in Australia. quarterly due dates
Source: ATO

 It’s possible to make monthly payments or as often as you like just as long as the total super contribution for the quarter is met by the due date.


5. You can claim tax deductions for superannuation in Australia!  

You can claim tax deductions for superannuation payments you make for your employees in the financial year you make them. 

Take note that missed payments may attract the Superannuation Guarantee Charge or SGC and SGCs are not tax deductible.  

Also, super contributions for employees aged 75 above must be paid quarterly or they will not be tax deductible.  

If you have more questions or concerns and are having difficulties paying superannuation in Australia, get in touch with us today! We can help you!