Superannuation Basics

Superannuation is a form of compulsory savings (to compliment a retirement pension) which a person may only access when retiring from the workforce and subject to other restrictions, such as age. The Superannuation Guarantee (Administration) Act 1992 (Cth) effectively requires employers throughout Australia to make superannuation contributions (in addition to Gross Taxable Earnings) for their employees at the applicable superannuation rate (Currently 9.5% of their ‘ordinary time earnings’). The superannuation amounts is open to additional ‘salary sacrifice’ arrangements where applicable, and the effect on the taxable pay variable depending on the agreement in place, again complexities reign in such circumstances, payroll professionals should be able to guide you through the calculations models for all forms for Superannuation processing.

Payment and Remittance of Superannuation rates are now regulated by the Superstream legislation, which has strict reporting and payment qualities/timelines. Super totals must be shown on employee pay advices, and payable to the relevant employees ‘fund of choice’ on a quarterly basis (at the very least). In the case an employee does not have a chosen super fund, the employer must pay into a ‘default’ fund, and will need to register beforehand for this to be accepted. Failure to comply with the superannuation legislation means the employer will be liable for a superannuation guarantee charge (made up of the superannuation guarantee shortfall amount, interest on that amount, and an administration fee).

Note that Easy Payroll includes superannuation calculation, documentation, processing and payment options through all service solutions. Super Headache Gone!

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