Buzz# 1 : Super – lets make it easy for small business owners

February 18, 2015
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Super Gold EggsHow much to pay and when to pay (the rules)

Super is a necessary evil for small business owners.  Super doesn’t have to be complicated, but it certainly pays to be smart. It takes small business owners time and money to administer Super payments and unfortunately if there is an error the fines will hurt. The way I see it we have to work together to make sure it is as easy as possible for small businesses to manage and control the administration of Super payments to employees.

Generally, you have to pay super for an employee if they’re 18 years or over and you pay them $450 or more (before tax) in salary or wages in a month. It doesn’t matter whether the employee is full time, part time or casual.

You’re an employer for super guarantee purposes if you employ a person under a verbal or written employment contract on a full-time, part-time or casual basis.

As an employer, you currently must pay a minimum of 9.5% of each eligible employee’s ordinary time earning each quarter in superannuation up to a maximum of $197,000 per year.  This is called the Superannuation Guarantee (SG).

Ordinary time earnings (OTE) is usually the amount your employee earns for their ordinary hours of work. It includes things like commissions, shift loadings and allowances, but doesn’t include overtime payments or salary sacrifice.

Super is calculated quarterly – that is, every three months, for each of your employees and has to be paid by the 28th of the following month to a registered Super Account or Retirement Savings Fund.

 

Lets make it easy…by using the ATO’s Super Calculator

You can use the ATO’s  Superannuation guarantee (SG) contributions calculator to work out how much super you must contribute for your eligible workers.  This is a great service offered by the ATO and it provides a clear determination of how much you should pay.

 

Lets make it even easier… by using the Small Business Superannuation Clearing House

The Small Business Superannuation Clearing House is a free online super payments service that helps small businesses with 19 or fewer employees meet their super guarantee obligations.  It is a government-run online service for small businesses, which helps with the administration of making superannuation guarantee contributions for employees.

The small business superannuation clearing house allows employers to make a single electronic payment, with the clearing house distributing the individual contribution amounts each employee’s superannuation fund.  This free service can potentially save you time, money and a headache at Super time.

Find out more

Phone 1300 660 048 or email SBSCHEnquiries@sbsch.gov.au for information about the Small Business Superannuation Clearing House.

 

Paying your own Super as a business owner

If you’re a sole trader or a partner in a partnership you don’t have to make super contributions to a super fund for yourself, but you might want to make super contributions anyway to save for your retirement. You may be able to claim a full deduction for your super contributions and may be eligible for matching co-contributions from the government.

As a Sole trader myself I know that Super is the last thing that you would consider paying. However keep in mind, the current estimate on the amount of Super an individual needs to accumulate by the retirement age to comfortably fund your retirement is $1,000,000. The majority of Australian are way off this….it makes you think doesn’t it.

Let us help you make your Super payment obligations painfree by setting up a system that is easy and efficient, nerilee@onecloudaccounts.com.au

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