Superannuation is money you set aside on behalf of your workers to provide for their retirement. You are required by law to make minimum super payments for all eligible workers.
Running a business and employing people involves superannuation obligations.
All employees are covered by a superannuation guarantee which means that employers need to take certain steps to meet their requirements. If you're a sole trader, or in a partnership, you're not obliged to pay super.
You can use the Australian Taxation Office (ATO) Superannuation guarantee contributions calculator to work out how much super you must contribute for your eligible workers.
Visit the ATO website to find out about your obligations.
SuperStream is a standard that requires employers to provide payments and the associated data to superannuation funds in a specific electronic format.
From 1 July 2015, employers with 19 or fewer employees started using the SuperStream standard for contributions. Larger employers should already be using SuperStream.
Small Business Superannuation Clearing House
The Small Business Superannuation Clearing House is a free, online service for employers with 19 or fewer employees, as well as businesses with an annual aggregated turnover of less than $2 million, that helps small businesses to meet their superannuation requirements.
Employers can make super guarantee contributions as a single electronic payment to the clearing house, which then distributes the payments to employees' funds.
You can register for the clearing house through the Australian Taxation Office. For more information, call 1300 660 048.
Self-managed super funds
Self-managed super funds (SMSF) provide a way of saving for your retirement. The difference between an SMSF and other types of funds is that the members of an SMSF are usually also the trustees.
If you choose to set up a SMSF, you are responsible for complying with the super tax and laws. This means that you need to have the time and skills to do it. Your SMSF needs to be set up correctly so that it is eligible for tax concessions, can receive contributions and is as easy as possible to administer.
The Australian Taxation Office recommends that you seek professional advice prior to setting up a SMSF to receive advice specific to your fund’s circumstances.
Find out more about setting up and managing a SMSF.
It is important to record how you manage superannuation obligations for each employee. You must keep records that show:
- how much super guarantee (SG) you paid for each employee and how it was calculated
- that you have offered each eligible employee a choice of super fund
- evidence that you've given the Standard choice form to all eligible employees – for example, emails if you issued the form that way – and the written information your employee provided when they nominated their chosen fund
- details of employees who don’t have to be offered a choice of super fund
- confirmation that your nominated (default) fund offers a MySuper product
- receipts or other documents issued by the fund showing you've made super contributions for that employee.
You can use whatever method suits you best to keep these records, but your records must be written in English, you must keep the records for five years, and if you keep electronic records, software must be available to access older floppy disks, CDs and computer records.
Even if you use a clearing house to distribute super to your employees' funds, you're still responsible for keeping adequate records of super guarantee payments.