Get your head out of the sand when it comes to paying employee superannuation.
Unfortunately, it’s not a choice, it’s an obligation to pay your employees superannuation. Yet a great deal of businesses still don’t understand their reporting and payment obligations and an even bigger number are not abiding by the obligations.
Good news is the ATO have provided an amnesty period to allow employees to get up to date with their superannuation lodgments.
The current legislation state that superannuation is due to be paid to the employees fund within 28 days after the quarter ends.
There are numerous tips and tricks to keep on top of your superannuation payments. We have helped clients implement various systems to keep them on top of their obligations while considering the cash flow of a small business. One option is to make the employee superannuation payment at the time as your payroll is paid to employees.
Xero is one software which makes this super easy (excuse the pun) with their Xero auto super.
STP (Single Touch Payroll) is now being introduced (refer to our blog on STP here) and is being implemented 1 July 2019 to all business.
My opinion is that the ATO will soon enough change legislation to make superannuation payments fall due on the date which payroll is processed and paid to employees.
It is reported that this will provide an extra $224 million of superannuation profits to employees for “on time payments”.
If the ATO take charge of your overdue super payments, they charge a fee of $20 per employee per quarter and interest is also charged and paid to the employees super. This can add up to be a large amount of addition funds payable.
Let alone the fine and penalties a business and it’s directors can face for non compliance.
Superannuation is a director liability, therefore in the event of liquidation or bankruptcy it can be deemed the responsibility of the director to pay outstanding amounts. (Seek independent advise from a liquidation specialist)
Want to get your superannuation obligations? Talk to us to strategize the best system for your business.