Checks to comply with superannuation guarantee obligations
The ATO has set out some simple checks for practitioners to undertake to ensure their employer clients are meeting their superannuation guarantee (SG) obligations.
First, it is important to consider which workers are eligible to receive SG contributions. Workers who are classified as employees under general principles are normally eligible to receive SG contributions on their salary and wages. However, modified rules can apply to certain workers including employees under 18, private or domestic workers and employees working overseas.
Even though a worker might be a genuine contractor, just be aware this does not always mean that SG doesn’t apply. For example, contractors can be entitled to SG where they perform work under a contract that is wholly or principally for their labour. Also, SG can apply to workers in the sports, entertainment and arts industry even if they aren’t employees under common law.
Another area where the ATO is encouraging checks to be undertaken is around ensuring the correct amount of SG is paid on time and to the right superannuation fund.
When it comes to the right superannuation fund and depending on the circumstances, this will either normally be a superannuation fund of the employee’s choice, the employee’s existing stapled fund or the employer’s default fund.
While the SG rate for the 2024 income year is 11%, this increases to 11.5% from 1 July 2024. It will be important to take this into account to ensure SG contributions are calculated correctly.
In terms of timing, SG contributions must be received by the fund on or before 28 days after the end of each quarter. For the June 2024 quarter, this means superannuation contributions must be received on or before 28 July 2024.
If the payment is late or has been missed, harsh penalties and other obligations will normally be triggered. In these cases, practitioners can assist employers by checking that they’ve lodged a superannuation guarantee charge statement and paid the superannuation guarantee charge to the ATO. Just remember that the superannuation guarantee charge is not deductible to the employer.
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