Are you paying the right amount of super?
The amount of super you must pay employees is set out by law. This is currently set at 9.5% of an employee’s ordinary time earnings.
‘Ordinary time earnings’ (OTE) is generally what employees earn for ‘ordinary’ hours of work, including over-award payments, commissions, certain allowances, and paid leave, but not including overtime in most cases.
You can use the ATO checklist to help calculate OTE.
The SG rate is rising
From 1 July 2021, SG will rise to 10% and then continue to increase in 0.5% increments each financial year until it reaches 12% on 1 July 2025, where it will remain.
Some of your employees may ask you to pay an extra portion of their salary or wages into super, either on a before-tax (salary sacrifice) or after tax (member voluntary) basis.
If you have employees over the age of 65, a Work Test declaration may be required before salary sacrifice and member voluntary contributions can be accepted by the fund.
There are some employees who are exempt under the SG legislation.
Employees can easily find out if adding a little extra into their super could help reduce their income tax, or get them a government co-contribution payment, and help them achieve their dream retirement.
Employees can see the difference extra contributions could make to their super using this calculator.
Super is calculated and tracked when you record your employees’ pay. When super is due, you can create a single contribution file including payments to all super funds in a single batch using Beam.
Disclaimer: this communication is provided by Precision and contains general information only. Any advice does not take into account your personal objectives, financial situation or needs. KeyPay does not provide financial product advice and does not recommend any particular clearing house provider. Beam is issued by Precision Administration Services Pty Ltd (ABN 47 098 977 667, AFSL No. 246 604). Visit www.beamconnect.com.au for more information. Consider the PDS before making a decision. Precision is wholly owned by Sunsuper Pty Ltd ABN 88 010 720 840, AFSL No. 228 975 as Trustee for the Sunsuper Superannuation Fund (ABN 98 503 137 921).