More choice on super for employees

Generally, if an employee is paid $450 or more before tax in a calendar month, then the employer has to pay super on top of their wages to provide for their retirement.

The minimum they must pay is known as the super guarantee (SG) and is currently 9.5% of an employee’s ordinary time earnings. This must be paid at least four times a year, by the quarterly due dates and must be paid and reported electronically in a standard format, meeting SuperStream requirements.

New workplace determinations and enterprise agreements must now offer employees the right to choose the super fund into which their compulsory super contributions are paid. This applies to all new employees and existing employees who request to choose their super fund.

The employer can either give their employee a Superannuation (super) choice form to complete or they can nominate their fund by completing the standard choice form through the ATO online services.

The employer must then pay the employee’s compulsory super to their nominated fund within two months. If no fund is selected, then the employer can continue to pay into the same fund previously used or the default fund.

Employers may be penalised if they don’t offer eligible employees a choice of fund or don’t pay super into the chosen fund.

Call in at your local TaxAssist Accountants for help and advice with any of the above.

Date published 29 Jan 2021