MYTH 1: If I pay my super late, it’s still a tax deduction for my business.
FALSE Always pay your employee super on time. Click here for the due dates. The penalties for not paying on time can be expensive. Late super is not tax deductible, must be reported to the ATO and penalties and interest is applied.
MYTH 2: If I have employees, I have to report and pay my super electronically through a super clearing house.
TRUE You must pay and report your super electronically via Super Stream unless you are specifically exempted because you are either a sole trader and only pay super contributions for yourself, not employees, or you are an employee of your own company or Trust and your super is paid to your own SMSF.
MYTH 3: If I don’t pay my super on time, I just need to catch it up with the fund as soon as possible.
FALSE Well kind of, you should try to lodge and pay your super as soon as possible but if you are late you also need to lodge Super Guarantee Charge (SGC) forms with the ATO. Once your super is late, you will need to pay the charge to the ATO which includes:
- Any remaining unpaid super
- An admin fee
The ATO then process the forms and transfers the super and any interest to your employee’s fund.
MYTH 4: If my employee doesn’t let me know their preferred super fund I can pay to our default fund.
TRUE Make sure you have given all employees a Super Choice form. You should nominate a default fund on the Super Choice form you give to employees. Your employees can choose their preferred super fund by returning the form to you but if they don’t return the form, the default fund means you can make their contributions and continue to meet your employer obligations.
MYTH 5: I don’t have to pay super on commissions I pay to my employee.
FALSE Super is payable on all wage items that the ATO considers are Ordinary Time Earnings (OTE) which commonly includes gross wages and commissions but can also include allowances and leave loading. Check out the ATO checklist for guidance.
MYTH 6: Super for employees is going up from 9.5% to 10% from 1 July 2021.
TRUE Super is currently 9.5% of ordinary time earnings. Legislation has passed to increase this to 10% from 1 July 2021, steadily increasing to 12% by 2028.
MYTH 7: I don’t need to pay super on any contractors who have an ABN and give me an invoice.
FALSE Super doesn’t just apply to employees. The super laws can extend to contractors who are providing labour only services to your business. This applies even if you are receiving an invoice with an ABN from your supplier.
MYTH 8: I’m a Director of my own company and I pay myself a wage – I don’t need to pay super as it’s just for me.
FALSE Family members, including directors, who are paid a wage for working in the business are treated the same as any other employee. There are no exemptions to super requirements for family members or Directors.
The team at Atticus Accountants are really passionate about helping our business clients to get this correct to minimise the risks to your business and avoid costly mistakes. We would love to help if you have any questions or are unsure of your obligations.