by Mark Foxley-Conolly, Director
As a business owner and employer, you have legal obligations to make appropriate super arrangements and payments for your employees. As an individual, paying into your own super is one of the most tax-effective ways to build your financial future.
In this article, our super checklist outlines your obligations for managing employee super contributions. When it comes to your personal super, we recommend 5 Personal Super Tips for Business Owners.
Super Checklist: Obligations for Employers
|#1||MySuper Authorisation – The super fund you choose must be authorised to offer a MySuper product. These funds are referred to as ‘default’ or ’employer-nominated’ funds.|
|#2||Industrial Awards – There are specific super funds, available as default funds, for specific industry awards, so consider the industrial awards that apply to your employees.|
|#3||Fees – Consider the fees that each potential fund would charge your employees and understand what they would get for their money. The fund with the lowest fees may not necessarily be the most appropriate for your employees.|
Diversified Investment Strategy – MySuper funds must offer a diversified investment strategy, allowing your employees to choose from a range of asset categories with a range of investment options (conservative, growth, aggressive, balanced etc). This is important, as their investment needs are likely to change over their working lives.
Performance – While it’s important to remember that past performance is no indicator of future performance, you should consider the performance over about a 5-year period of the super funds you are considering for your employees.
Insurance – MySuper funds must offer insurance unless a fund member opts out. You should review the premiums, amount and type of insurance cover available, as well as any exclusions – particularly for casual or part-time employees. High insurance premiums may erode super savings for employees with low super balances.
Extra benefits – Find out if there are any extra benefits offered by a fund, such as seminars, financial advice and an easy-to-use website which may be helpful for your employees.
Incentives – Super legislation prohibits incentives of any type (tickets, holidays, increased interest on a savings account etc) being offered to employers on condition that their employees join that fund.
Professional assistance – Picking a super fund for your staff is an important decision and you are likely to need help from a financial adviser. The Australian Taxation Office (ATO) website provides helpful information on setting up super.
Small Business Superannuation Clearing House (SBSCH) – When you use the ATO’s Clearing House, you need to make payment by the 21st day of the quarter so the money arrives in the employee’s super fund by the 28th day of the quarter. If you pay your employees super before the 28th but it has not been received by their super fund, you are not entitled to a tax deduction for that payment. Read more about the SBSCH.
If you would like assistance to more effectively plan your super, need information about Self-Managed Super Funds (SMSFs), or have questions about legal obligations or super strategies, please contact Mark Foxley-Conolly on 07 5479 5499 or email firstname.lastname@example.org to discuss your needs.
At VBA we specialise in strategic tax advice, offering tax and financial reporting for individual income earners, family businesses, tradies and construction companies.
Victor Bimrose Accountancy Pty Ltd (ASIC No. 1259423) ABN 53 010 957 294 is a Corporate Authorised Representative of Merit Wealth Pty Ltd ABN 89 125 557 002, Australian Financial Services Licence Number 409361.
Mark Foxley-Conolly (ASIC No. 1259421) is a Limited Authorised Representative of Merit Wealth Pty Ltd ABN 89 125 557 002, Australian Financial Services Licence Number 409361
General Advice Warning: This information has been prepared without taking into account your objectives, financial situation or needs. Because of this, you should, before acting on this information, consider its appropriateness, having regard to your objectives, financial situation or needs.