Superannuation requirements are a tricky subject and something that many businesses get wrong. Put yourself in front of the pack by ensuring your methods are up-to-date and meet all the legal requirements.
Are you making these common superannuation mistakes?
Failing to provide super fund choice
If you’re not giving your employees access to nominate their own chosen superannuation fund then you are breaking the law.
While it's very convenient to have all your staff signed up with your employer-nominated fund, you still must offer all your employees a choice of superannuation fund and provide their TFNs to their chosen fund if they decide to choose their own.
If you don’t, you’re in danger of enormous penalties that will really harm your business.
Not budgeting for superannuation
If you aren’t currently budgeting for superannuation, you need to start now.
Setting aside money in your budget for superannuation payments is planning for success and increases the legitimacy of your company.
Consider all the legal and financial ramifications of not budgeting for superannuation. The picture is not pretty. The consequences can be colossal..
How will a bookkeeper help?
Budgeting for super means you need to have an expert knowledge of superannuation law, and the current ATO rules. And it’s common knowledge that these laws are constantly changing, ranging from small tweaks to large-scale changes with every passing federal budget. Instead of having to keep up yourself, a bookkeeper comes with that knowledge on hand.
At Maximum Business Solutions, we ensure that all our clients are well covered when it comes to correct superannuation practices. There really isn’t a better way to ensure your practices are up to today’s standards than by connecting with a bookkeeping team.
Missing quarterly deadlines
You can pay your employees superannuation monthly or quarterly, but the Australian super system is fundamentally based on a quarterly system.
As an employer you need to be aware of the quarterly superannuation deadlines (the 28th of the quarter’s final month), and be able to show the ATO that you’ve met your quarterly superannuation payment requirements. If you miss the deadlines you’ll be hit by the superannuation guarantee charge.
Businesses that leave paying superannuation to the last minute often land in strife.
Keep in mind that if you’re paying your employee’s superannuation by EFTPOS or BPAY that there may a delay in the transaction so you want to make sure you make the payments with plenty of time for it to go through.
Be really careful when it comes to paying super...
Businesses can easily get years behind on their superannuation, and hope on the ignorance of their employees that they can get away with it.
While it's true that superannuation isn’t something many Australians pay much attention to, all it takes is for one employee to notice that you aren’t meeting your superannuation obligations and you can find yourself in enormous trouble.
Not only will you be made to pay exorbitant penalties, but you’ll have to pay back all that superannuation that you’ve missed. It’s a mistake that can essentially end a business.
Neglecting to track superannuation payments
You must have evidence to show you’ve met your superannuation requirements.
If you’re making superannuation payments to your employees as you go, it’s important that you track these payments and keep a record of them. Many business owners neglect this and land in trouble come end of financial year.
Also make sure, and this goes with all your financial files, that you backup your records in a secure location. Using a cloud-based bookkeeping software like MYOB or Xero is a great way to keep important business data protected.
Find a bookkeeper who will help you manage super payments
A bookkeeper keeps you on track and ensures you meet all the various deadlines, including superannuation. Want to learn more? Organise your first consultation with the Maximum Business Solutions team!