Superannuation Reforms

The Government released further superannuation reforms aimed at making employers meet their super obligations towards their workers.

The Government plans to introduce a package of measures designed to give the ATO near real-time visibility over SG compliance by employers. It includes measures to:

require super funds to report contributions received more frequently.
roll out of Single Touch Payroll (STP) Phase 2 which requires more reporting and compliance of super obligations.

Super guarantee

The ATO’s super guarantee gap would indicate that some employers are not aware or are ignorant of the SG rules and their obligations.

The following are some basic SG rules for employers:

$450 per month eligibility threshold was removed. Your employees no longer need to earn $450 per month to be eligible for super.
However, employees who are under 18 still need to work more than 30 hours in a week to be eligible.
you may need to pay super to your contractors, even if they have an ABN.

Furthermore, employers need to pay SG regardless of whether the employee:

is full-time, part-time or casual,
receives a super pension or annuity while still working – including those who qualify for the transition-to- retirement pension,
is a temporary resident – when they leave Australia, they can claim the payments you made through a departing Australia superannuation payment, although some foreign executives who hold certain visas may be exempt from SG,
is a company director, and
is a family member working in your business – provided they are eligible for SG.

From 1 July 2023, this will increase again, and all employers must pay all employees entitled to super 11% of their salary.

In addition to the SG charge, which imposes nominal interest and an administrative charge on top of the SG shortfall, the ATO can impose additional penalties of up to 200 percent of the SG charge.