The Australian Taxation Office (ATO) is planning to do an audit on businesses starting July 2016 to ensure that they are properly complying with paying the right amount of superannuation for their employees.
In relation to this, the ATO has identified four industries that “often need more help to meet their tax and super obligations”; these industries include car retailing, computer system design, bakery, and supermarket.
An employee is eligible for a super fund if he or she meets all of the following requirements:
- An employee must be 18 years old and above (employees under 18 must work at least 30 hours per week to become eligible);
- The employee receives a salary of not less than $450 after taxes in a month;
- The employee works full-time, or part-time/casual basis
- Or if he/she is a contractor that is paid under a contract that is wholly or principally for the labour of the person.
Employers are also required to provide their eligible employees to choose which super fund they want their contributions to go to (through a Standard Choice form) within their first 28 days of working in the company. The employers would then have to make sure that super payments are settled at least every quarter on the due dates which are: 28 April, 28 July, 28 October, and 28 January.
Since 1 July 2014, the minimum super contributions for eligible employees is at 9.5% of their ordinary working hours. Payments made for super contributions could be generally claimed against taxes.
The ATO reminds that employers who do not make contributions on these deadlines will be subject to the Superannuation Guarantee Charge (SGC). The Tax Office, however, acknowledges the genuine efforts of employers to catch up with their late super payments and will unlikely take further action for delayed settlements. However, if the employer takes no action and is audited by the ATO or employees of the business will file a complaint about late super payments, the employer will have to be liable for SGC payments plus other penalties.
Along with auditing super payments, the ATO will also be focusing on pay as you go (PAYG) withholding as well as fringe benefits tax (FBT). Businesses are expected to have accurate records as the ATO begin their auditing in the coming weeks.
Not sure about your superannuation obligations? Contact our office on (03) 9744 7144 and talk to our professional team.