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A. What to consider as an employer

Key features of the SG system

Section: 1.2

Key features of the SG system  - a reminder for employers

  • 9.5% of OTE must be contributed for eligible employees up to a maximum contributions base
  • contributions must be made to a complying superannuation fund
  • Payments must be received by the super fund no later than 28 days after the end of the quarter
  • Contributions on-time are tax deductible to the employer

Key facts from the ATO:

  • In 2017-2018, there were about 935,000 employers and 12.4 million employees in Australia.
  • From 1 July 2010 to 30 June 2018, over $2.6 billion has been transferred by the ATO to employees' super funds on behalf of 1.8 million employees
  • About 33,000 reports of unpaid super guarantee are made each year
  • Reports of unpaid super guarantee are received mostly fro employees and former employees of small businesses
  • Non-compliance by employers may include poor cash flow management by employers, lack of understanding by employers of their super guarantee obligations, low levels of business experience and, in some cases, deliberate non-payment.
  • Insolvency amongst employers means that debts are sometimes difficult to collect on behalf of employees.

This technical resource is intended for the use of financial advisers only. It is current as at the date of publication but may be subject to change. This publication has been prepared without taking into account a potential investor's objectives, financial situation, needs or objectives. Before making a recommendation based on this material, you should consider its appropriateness based on the client's objectives, financial situation and needs. Rainmaker Group is not a registered tax agent under the Tax Agent Services Act 2009. Your client should refer to a registered tax agent before relying on information published herein that may impact their tax obligations, liabilities or entitlements. 

Last modified: Monday, October 26, 2020