A new report has revealed around 2.4 million or almost one third of Australian workers are missing out on some or all of their super entitlements and little is being done about it.
Under the Superannuation Guarantee (SG), employers must contribute 9.5 per cent into the super account of every worker over the age of 18 earning $450 a month. But, according to data from the Australian Taxation Office and Australian Bureau of Statistics, many Australian employers are dodging compulsory superannuation payments to the tune of $3.6 billion a year (2013-2014). This equates to $1,489 or close to four months of super for the average worker affected.
Small and medium-sized businesses were found to be least likely to pay SG and workers under the age of 30 were more likely to miss out; 37 per cent of 20-24 year-olds compared to 23 per cent of 50-54 year-olds. Currently, employers have up to four months to pay SG. SG payments must be made to complying funds or retirement savings accounts (RSAs) by the quarterly due dates, which are 28 days after the end of each quarter. Employers who don’t pay the minimum amount of SG for their employee into the correct fund by the due date, may have to pay the super guarantee charge (SGC).
The SGC is made up of: SG shortfall amounts calculated on the employee’s salary or wages; interest on those amounts (currently 10 per cent) and an administration fee ($20 per employee, per quarter). Employers who fail to meet their SG obligations may also be liable for a range of penalties or charges on top of the super guarantee charge.
Paying super is an important part of being an employer. To ensure your business remains compliant, remember to: pay the right amount (9.5 per cent) of employee ordinary time earnings; pay on time; pay the right way and keep records to show you have met your obligations. Also, it is important to note that super is only tax deductible if paid on time.
For more information, contact us at Leenane Templeton on 02 4926 2300 or email success@leenanetempleton.com.au
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