Easy guide to superannuation

Easy guide to superannuation

2 Contents Understanding super obligations as an employer 3 Keeping records 4 Offering employees a choice of super funds 5 Superannuation Guarantee for employees 70 and over 6 MySuper replaces default super funds 6 SuperStream helps your business 7 The super rate 9 When to pay super? 10 How can I pay super? 11 Paying super using AccountRight 11 Time saving tips when paying super using AccountRight 12 Looking for a bookkeeper, consultant or trainer? 14 The information provided within this guide is of a general nature and is intended to be a guide only, in accordance with our Legal Disclaimer. For specific advice regarding your particular circumstances, please consult your tax agent or the Australian Taxation Office as appropriate.

3 Understanding super obligations as an employer As an employer, you play an important role in the future retirement of your staff by helping them grow and protect the savings they ve earned through super. This guide will give you an understanding of the ins and outs of super and help you stay on top of your workplace obligations.

4 Keeping records Keeping employment records is an essential part of running your business and helps you to claim all your deductions. The ATO requires you to keep your records in either printed or electronic format for five years. General employment records must include: +employer s + name + + employer s Australian Business Number (ABN) + + employee s name + + employee s commencement date + + the basis of the employee s employment (full or part-time and permanent, temporary or casual). If an employee wishes to leave, the record must include: + + leave taken, if any + + the balance of the employee s leave entitlement. + + the rate of pay paid to the employee + + the gross and net amounts paid and any deductions from the gross amount + + the details of any incentive-based payment, bonus, loading, penalty rate, or other monetary allowance or separately identifiable entitlement paid. If the employer is required to make superannuation contributions for the benefit of the employee. The record must include: + + the amount of the contributions made + + the dates on which each contribution was made + + the period over which the contributions were made + + the name of any fund to which a contribution was made. Where the employment has been terminated, the records must include: + + Whether the employment was terminated by consent, by notice, or in some other manner + + The name of the person who terminated the employment. Wages can include: wages, remuneration, salaries, allowances, commissions, bonuses, superannuation contributions, salary sacrifice, fringe benefits, employment termination payments and payments to contractors and payments to employment agencies.

5 Offering employees a choice of super funds Your employees have a choice to select a super fund that you pay their super into. Follow the below steps to meet your employer obligations: 1 Identify whether your employees are eligible to choose their super fund, as it depends on the type of award or industrial agreement that you employee them under. 2 Provide a standard choice form to eligible employees who prefer to choose a super fund. 3 Act on your employee s choice and arrange payment. For more information on the standard choice forms, please visit the ATO website.

6 Superannuation Guarantee for employees 70 and over The age limit for super payments was removed from the Superannuation Guarantee Act in 2013. This means if you have employees aged 70 or over, you re now required to pay them super along with all your other employees. MySuper replaces default super funds MySuper was introduced by the Government in 2013 as a simple and cost effective default super fund (for when your employer doesn t specify a choice of fund). From 1 January 2014 it became mandatory to pay super contributions to a MySuper fund, unless your employee has selected their own preferred fund. If you haven t already, you should check that your default super fund is a MySuper fund. The benefits of MySuper: + + Improved simplicity, transparency and comparability of default super funds + + A number of features designed just for members + + Up to 40% decrease in super fees anticipated + + All APRA regulated MySuper funds must provide life, total and permanent disability cover on an opt out basis.

7 SuperStream helps your business SuperStream is a government initiative being implemented by the ATO, with a goal of improving the efficiency of the superannuation system. It s a new process of managing data and payments that business owners have to comply with when making superannuation contributions for their employees. Employers must now make super contributions on behalf of their employees by submitting data and payments electronically in accordance with the SuperStream standard. SuperStream will help: + + Speed up the time it takes for super contributions to be credited against the member s super account (from weeks to just days). + + Provide better information about the amount and timing of superannuation payments to employees. + + Provide notification from funds to members on whether contributions have or have not been received. + + Reduce lost funds not credited against a super member.

8 Turn days into minutes every time you pay super Don t use any software Use only payroll software Use MYOB Time taken: 1 to 3 days Time taken: 1 to 3 hours Time taken: 10 to 30 minutes Work out payroll manually Generate the payroll Generate the payroll Work out the super and PAYG liabilities manually Generate the payroll super report to work out the super and PAYG obligations Generate the payroll super report to work out the super and PAYG obligations For each employee: + + Work out the super guarantee and salary sacrifice super amounts + + Complete the Superfund Contribution Report Ensure the super fund contribution report complies with the file format of each super fund or clearing house Check and verify amounts Pay super by: + + Mailing cheques or + + Paying electronically Submit the report online Authorise, and super is paid automatically Mail the super fund contribution reports to each super fund Pay super electronically *Time saving estimates based on research across 5 businesses with up to 150 employees.

9 The super rate The Superannuation Guarantee (SG) is the minimum amount of super you need to pay for each employee expressed as a percentage of their earnings. Year range Super rate 1 July 2012 9.00% From 1 July 2013 9.25% From 1 July 2014 9.50% From 1 July 2015 9.50% From 1 July 2016 9.50% From 1 July 2017 9.50% From 1 July 2018 9.50% From 1 July 2019 9.50% From 1 July 2020 9.50% From 1 July 2021 10.00% From 1 July 2022 10.50% From 1 July 2023 11.00% From 1 July 2024 11.50% From 1 July 2025 12.00%

10 When to pay super? Business owners must pay a contribution of a minimum of 9.5% of each eligible worker s ordinary time earnings in super contributions, each quarter. Don t be late If your super payments are late, the ATO request you complete a Superannuation Guarantee Charge Statement, and the super, the interest and administration fee. These non-tax deductable expenses can cost many thousands of dollars so it is in your best interests to pay on time. Quarter Period Payment due date 1 1 July 30 September 28 October 2 1 October 31 December 28 January 3 1 January 31 March 28 April 4 1 April 30 June 28 July

11 How can I pay super? Business owners can make super payments directly to the superannuation fund that their employees choose. They can pay via cheque, bank transfer or directly from their accounting software packages such as MYOB AccountRight. Paying super using AccountRight MYOB automates the process of making super payments. It s as easy as selecting Pay Super, choosing which contributions to pay and then approving the payment. MYOB will take care of the payment and transmission of the information through to the super fund. Watch this video to see how to complete 3 days work in 30 minutes when paying super in AccountRight.

12 Time saving tips when paying super using AccountRight 1 2 Pay super contributions by EFT or BPAY, not cheque or in cash Pay super contributions on time Some super funds do not accept super contributions in cash or cheque at all. Others don t accept cash or cheque contributions below a certain amount. Others only accept cash contribution by specific methods like money order. Using EFT can help you save time and hassle when making super contributions so you don t spend all your time in the line at your local post office. Utilizing EFT to pay contributions is also a great way to keep a digital record of making a payment. The ATO are strict on record keeping and fines can be levied for incorrect record keeping. The ATO are becoming increasingly strict enforcing superannuation deadlines. Being late, even by a day can attract a penalty. However, the time consuming task is having to complete a Superannuation Guarantee Charge Statement. If you ve made a contribution late the ATO often requests you complete this report. That s a time consuming task you don t want. Plus, don t forget late contributions are non-tax-deductable expenses and can cost you thousands of dollars so it is in your best interests to pay on time.

13 Time saving tips when paying super using AccountRight 3 Use AccountRight correctly, record employee superannuation details 4 Use MYOB AccountRight to automate the contribution process Use your Employee s Card in AccountRight to record their super fund information. Correctly storing your employee s super fund details (like their membership number) on their employee card will give you quick access to details when you need to make contributions. What s more, AccountRight provides you the option to create a Superannuation Choice Form. A great way to provide the ATO evidence that you ve provided an employee a choice of super fund, one of their key super compliance requirements. For details on how to enter superannuation information on an Employee Card in AccountRight visit our online help page. Bonus time saving tip: Why is proper record keeping worthwhile? Some super funds have different yet similar looking fund names. You don t want to make a contribution to the incorrect fund. Not only is it time consuming to correct this mistake (you ll have to make a submission to the super fund and show proof of payment) but it could also get you in hot water with the ATO. The latest version of MYOB AccountRight includes a feature called Pay Super. Once you re signedup your bank account will be linked to your MYOB AccountRight software. You can then use AccountRight to calculate the super contribution for your employee, verify the amount and authorise the amount in your software. The Pay Super feature will then process the payment for you. Just like that MYOB will take care of the payment and transmission of the information through to the super fund. It s free with a subscription, there is no limit to the number of employees paid or transactions and it s compliant with the ATO s SuperStream standard.

14 Looking for a bookkeeper, consultant or trainer? MYOB Certified Consultants are accredited by MYOB to provide onsite support for MYOB Products including sales, setup, implementation, training, advanced reporting, trouble shooting and bookkeeping. Find an MYOB partner nearest to you. Search by postcode Have any questions? We re here to help and our support team is available by calling 1300 555 111 or online. Sit back and relax knowing you re in the hands of experts.

15 Power to manage business, your way Stay competitive MYOB AccountRight is powerful accounting with business management capabilities so your business can stay competitive to get ahead. Stay in control Fully customisable, it enables you to stay in control of the most demanding jobs, inventory and multiple company accounts. Stay compliant Improve productivity and efficiency, make ATO compliance easy, and choose the plan that best suits your business needs. Learn more No screenshot for AE

We re here to help myob.com.au 1300 555 111 by MYOB Australia. All rights reserved. No portion of this book may be reproduced mechanically, electronically, or by any other means including photocopying, without written permission from the publisher. MYOB Australia. Level 3, 235 Springvale Road, Glen Waverley, Victoria, 3150. GSME192642-1016