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A Superannuation Audit & Penalties – 10 tips to Minimise the Risk

Posted by: on 13 October 2014 in Compliance, Legislation, Multinational & Globalization, Payroll, Superannuation

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October 13 – by Sue Warren 

Avoid superannuation penalties, administration fees, and paperwork by following ADPs 10 super tips:

  1. Employer’s superannuation contribution increased from 9.25% to 9.5% in July 2014.
    Have you calculated a minimum 9.5% super for all employees?
    If not, you must;
    a.   update your employee’s super details now
    b.   calculate an additional 0.25% super for any ordinary time earnings they have been paid for the year
    c.   pay the outstanding amount into the employees’ super funds by no later than 28 October.
  1. Make sure you are calculating employees’ superannuation on all their ordinary time earnings. This is generally what your employees earn for their ordinary hours at work, including over-award payments, bonuses, commissions, shift-loadings and allowances that are not related to an expense.
  1. Ensure you have given all new employees a Standard choice form within 28 days of them commencing employment.
  1. Check that you have acted on an employee’s choice and are now sending their super contributions to their chosen fund.
  1. Are you using the correct Superannuation Standard Choice form?
    The latest version includes additional information required for SuperStream – such as a unique superannuation identifier (USI) and electronic service address (ESA). Download the form at: www.ato.gov.au/Forms/Superannuation-(super)-standard-choice-form/.
  1. Check that you have forwarded all new employees’ tax file numbers to their super funds within the required timeframe.
  1. Make sure that your super contributions are paid appropriately.
    Casual employees are entitled to super payments when they earn more than $450 in a month.  This amount may differ depending on the awards – For some employees, the threshold may be $350 a month.
  1. If you apply the maximum super contribution base to your high income employees, ensure you have you paid the correct amount – For instance, you must pay $4,695.85 for the first $49,430 paid to them for the quarter.
  1. Have you had contractors invoice you for work done during the quarter?
    Make sure the ATO does not classify them as an employee for super purposes. If in doubt visit: www.ato.gov.au/calculators-and-tools/employee-or-contractor/.
  1. Have you paid employees’ personal contributions to their super funds on a monthly basis?
    While employer contributions can be paid quarterly, member after-tax contributions must be paid monthly.

Finally, if you pay super after the quarterly deadline, it can no longer be treated as a tax deduction to your business.

 

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TAGS: audits Casual employees Employees Employers penalties Personal Contributions risk Super Superannuation Tax Tax File Number

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