With quarterly superannuation payments due on January 28th for the last quarter (payments are always due 28 days after the quarter ends). It seemed like an appropriate time to discuss superannuation in more detail. If you run a small business with employees who are 18 and over, and earn more than $450 before tax in a calendar month. You are legally obligated to pay a minimum of 9.5 % superannuation your employees ordinary time earnings (OTE).
Ordinary Time Earnings (OTE)
Allowances but not overtime payments
Rostered Days Off (RDO)
In Lieu of Notice
Bonuses (except for in respect of overtime only)
Always check with your accountant or certified bookkeeper to ensure that you are calculating the correct amount of superannuation based on Ordinary Time Earnings. There are a number of ‘ordinary time earnings’ that must be taken into consideration during payroll and superannuation contributions.
Bilanz for Business, located in North Fremantle, Western Australia, has experienced bookkeepers and accountants available to help answer any super related questions. Part of our service that we provide is to manage your business’s superannuation payments, on time, every time. For small businesses in Perth, Bilanz can provide crucial forecasts and help to manage cash flow so that there is adequate cash available in order to pay each quarter. Don’t get stuck in a financial deficit each time super is due. We offer competitive pricing for Payroll Packages (Which includes superannuation reconciliation and reporting).
Jane Betschel, head of customer marketing and direct sales at MYOB states that for the businesses that do make superannuation payments, almost a quarter (24 per cent) of operators surveyed revealed they had issues meeting payments due to cashflow issues.
“We know that cashflow is one of the big pain points for businesses, particularly small and medium sized enterprises,” Betschel said. “Owner operators may sacrifice their own super payments to ensure that payments owing to staff are met. They may also decide to pay bills that will keep the doors open today, at the expense of future, personal financial security.
This is a reality for many small businesses.
The Consequences Of Paying Superannuation Late
Missing superannuation payments even by one day can cause serious financial strain on a small business and subjects you to the Superannuation Guarantee Charge (SGC), which is not tax deductible.
The charge is made up of:
- SG shortfall amounts (including any choice liability calculated on your employee’s salary or wages)
- interest on those amounts (currently 10%)
- an administration fee of $20 per employee, per quarter.
Director responsibilities for Superannuation:
A director that fails to meet the Super Guarantee Charge by the due date, then becomes personally liable. The ATO can initiate legal proceedings with Directors in order to recover the money owed. Don’t get caught out with missed payment dates. Ensure you have a reliable bookkeeper or accountant to keep you aware and up to date on payments.
Bookkeeping for business and payroll/superannuation management can be very time-consuming – it may be too much to do for a small team and yet not enough to employ a full-time bookkeeper. Bilanz bookkeeping and payroll management service are cost-effective so that business owners can focus on growing their businesses instead of focusing on the paperwork and legalities behind payroll, super and tax. We can assist you onsite or remotely and from as little as a few hours a quarter.
Get in touch which us today via the ‘Contact Us’ Page and we will be in touch with you as soon as possible.