Are you at risk from unpaid superannuation?
The Superannuation Guarantee, which sees employers make mandatory contributions to employee super pots, has been around for some time now. Intended to help people think seriously about the future, these compulsory savings are essential for good retirement planning.
Although employer contributions are mandatory for all eligible employees, reports tell us that underpaid or unpaid super still happens. This is a big problem and leaves employees out of pocket whilst exposing employers to huge financial risk.
The Australian Taxation Office (ATO) aims to set things right. Their approach to non-compliance is to help employers get it right and correct those that don’t. From administering a super guarantee charge to further penalties, such as personal liability and risk of imprisonment for company directors, it’s a rocky road for non-compliant employers.
Paying super contributions correctly and on time is not only a legal requirement for employers, but it also follows ethical best practice. Employees are more likely to remain loyal to an employer that follows fair and correct procedures.
We have previously commented on the problems that can arise from incorrect payroll, and employers can find themselves with similar difficulties if superannuation payments fall behind.
Ensure your company is compliant
Whether or not you personally process payroll and super contributions for your business, you will be held directly responsible if obligations are not met. Therefore, it’s a good idea to familiarise yourself with the ATO’s super checklist to ensure your company is compliant.
Paying the right amount, currently a minimum 9.5% of an employee’s ordinary time earnings, to the right place and on time is essential. You’ll also want to ensure that payments are being made in the right way as stipulated by the ATO.
Accurate record keeping is an important part of the process and can help your defence in the event of a dispute. Further guidance on compliance along with specific advice for small businesses can be found on the ATO website.
Get peace of mind on your payments
Payroll and superannuation compliance is essential for any successful business, but keeping on top of admin can be time consuming and take the attention away from other important business needs.
If you have questions about the process or would benefit from it being taken off your hands altogether, give us a call. We’ll make sure your obligations are met and give you the time back to focus on developing your business.