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Default Superannuation Fund and Super Guarantee Forms
Mar 17, 2019
Here are the things to remember before you offer your employee the option to choose a super fund via the Super Guarantee Choice Form.
When you employ someone you have to provide them with several forms:
- TFN Declaration
- Super Guarantee Choice Form
- Fair Work Statement
- Any other document to obtain information you require such as bank account details and next of kin.
Before you offer your employee the option to choose a super fund via the Super Guarantee Choice Form, you must nominate a fund that you will pay their super into if they can't or don't choose their own fund. You give your employee the details of this fund in section B of the Standard choice form.
This fund is your ‘default fund’
The super fund you nominate must:
- be a complying fund (one that meets specific requirements and obligations under super law)
- be registered by the Australian Prudential Regulation Authority (APRA) to offer a MySuper product.
You may also need to look at the award your employee is under, as the award may stipulate who you can use an a default fund.
Your default fund must be willing to accept the contributions. Some funds will not accept members who don’t contribute more than a certain amount each year. You also want a fund that you don’t have to setup paper work each time. Ensure the fund will accept the contributions when you pay it using the auto super function in Xero. Contact the fund prior to offering it as your default fund and listed it in section B of the Standard Choice Form.
What if they have a fund, and haven’t provided it to me by the time I have to pay super?
Remember, that not having superannuation
fund details is no excuse for paying superannuation late. This is why you have to have a default fund. If the employee doesn’t provide any information, you must pay into the default fund before the 28th day following the quarter.
What if I do pay their super late?
If you pay superannuation late, your business will not be entitled to a tax deduction for the amount. You may also be required to complete a Super Guarantee Charge Statement and pay the required fees.
The Super Guarantee Charge includes the amount of superannuation, interest at 10% and an administration fee of $20 per employee, per quarter. The unpaid amount is to be paid to the ATO, not the employees superannuation fund. If you paid late, you may be able to offset this amount against the charge.
Many businesses we talk to do not have a default fund setup and often wait for employee details, which costs them in the long run. Talk to our trusted bookkeepers and accountants
about your requirements to ensure you don’t miss out on tax deductions and pay super when you are required.
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There are 23 Modern Awards that are impacted by this change. The requirements that need to be met are outlined in the relevant award.
An employer and employee can agree that an annual salary covers entitlements like:
minimum weekly wages
penalties
overtime
allowances
annual leave loading.
Salary agreement should be documented in writing and identify which entitlements are include in the payment.
What does this mean for your business?
If you already have contracts in place with annualised salaries, you will need to ensure that the arrangement now complies with these new requirements. You may need to:
Review what employees are affected
Have a system to record all hours worked each pay period and have a way for the employees to sign off or acknowledge that this is accurate
Consider whether our current annualised salary arrangement meets the new Modern Award requirements of setting an outer limit of hours that can be worked. If not, you may need to issue new contracts.
Even if the annual salary you are paying your employees is higher than what they would be entitled to under a Modern Award , you need to take steps to implement the necessary changes so that the employer (and any managers) are not at risk of penalties under the Fair Work Act 2009 (Cth) for failure to comply with the terms of a Modern Award. This can technically occur even in instances where no underpayment has been made.
If you have any questions, speak to Fair Work, or give us a call , so we can help you find the information you may need.
An employer and employee can agree that an annual salary covers entitlements like:
minimum weekly wages
penalties
overtime
allowances
annual leave loading.
Salary agreement should be documented in writing and identify which entitlements are include in the payment.
What does this mean for your business?
If you already have contracts in place with annualised salaries, you will need to ensure that the arrangement now complies with these new requirements. You may need to:
Review what employees are affected
Have a system to record all hours worked each pay period and have a way for the employees to sign off or acknowledge that this is accurate
Consider whether our current annualised salary arrangement meets the new Modern Award requirements of setting an outer limit of hours that can be worked. If not, you may need to issue new contracts.
Even if the annual salary you are paying your employees is higher than what they would be entitled to under a Modern Award , you need to take steps to implement the necessary changes so that the employer (and any managers) are not at risk of penalties under the Fair Work Act 2009 (Cth) for failure to comply with the terms of a Modern Award. This can technically occur even in instances where no underpayment has been made.
If you have any questions, speak to Fair Work, or give us a call , so we can help you find the information you may need.
STP or Single Touch Payroll is changing the way employees report to the Australian Taxation Office (ATO) and it will become mandatory for all employers from 1 July 2019.For those with 20 or more employees, you should already be reporting STP, for those with under 20 employees, below are a few tips to help make sure you are STP ready.
The Fair Work Commission has announced that the national minimum wage will increase by 3.0% to $740.80 per week, or $19.49 per hour. The weekly rate is based on a 38-hour week for a full-time employee. This totals to an increase of $21.60 per week, or $0.56 cents per hour.
The Commission made the following comments in relation to the decision to award a lower increase than in the past 2017/2018 minimum wage review:
[10] We have decided to award a lower increase this year than that awarded last year having regard to the changes in the economic environment (in particular the recent fall in GDP growth and the drop in inflation) and the tax-transfer changes which have taken effect in the current Review period and which have provided a benefit to low-paid households.
[11] We are satisfied that the level of increase we have decided upon will not lead to any adverse inflationary outcome and nor will it have any measurable negative impact on employment. However, such an increase will mean an improvement in real wages for those employees who are reliant on the NMW and modern award minimum wages and an improvement in their living standards.
Who does the increase apply to:
The 3.0% increase applies to employees that get their pay rates from:
The national minimum wage - Applies to employees who aren’t covered by an award or agreement.
A modern award – For employees covered by an award, award rates will increase by 3.0%. If you are not sure which award applies, use Find My Award .
If you are covered by a registered agreement, you should check it to see whether this increase affects you.
The increase will also apply to:
junior employees
employees to whom training arrangements apply
employees with a disability
The increase does not affect employees who already get paid more than the new minimum wage.
Some penalty rates are changing too:
There will be further changes to certain penalty rates in some hospitality and retail awards from 1 July 2019, following a Commission decision in 2017.
For more information about what the changes are, who they affect and how they’re being implemented, visit the Penalty rates changes .
What happens next?
The Commission will issue draft determination and orders about how this decision affects modern awards. Pay rates in each award will be then updated.
With all these changes, Evolve Online Bookkeeping can help you if you have any enquiry about the wage increase and its application to your bookkeeping. We can assist you on updating your payroll for your affected employees. Contact us today and we will be glad to help you.
If you are a current client of Evolve Online Bookkeeping and we do your payroll, we will contact you once the new rates have been updated in the awards so that we can update your pay rates accordingly.
The Commission made the following comments in relation to the decision to award a lower increase than in the past 2017/2018 minimum wage review:
[10] We have decided to award a lower increase this year than that awarded last year having regard to the changes in the economic environment (in particular the recent fall in GDP growth and the drop in inflation) and the tax-transfer changes which have taken effect in the current Review period and which have provided a benefit to low-paid households.
[11] We are satisfied that the level of increase we have decided upon will not lead to any adverse inflationary outcome and nor will it have any measurable negative impact on employment. However, such an increase will mean an improvement in real wages for those employees who are reliant on the NMW and modern award minimum wages and an improvement in their living standards.
Who does the increase apply to:
The 3.0% increase applies to employees that get their pay rates from:
The national minimum wage - Applies to employees who aren’t covered by an award or agreement.
A modern award – For employees covered by an award, award rates will increase by 3.0%. If you are not sure which award applies, use Find My Award .
If you are covered by a registered agreement, you should check it to see whether this increase affects you.
The increase will also apply to:
junior employees
employees to whom training arrangements apply
employees with a disability
The increase does not affect employees who already get paid more than the new minimum wage.
Some penalty rates are changing too:
There will be further changes to certain penalty rates in some hospitality and retail awards from 1 July 2019, following a Commission decision in 2017.
For more information about what the changes are, who they affect and how they’re being implemented, visit the Penalty rates changes .
What happens next?
The Commission will issue draft determination and orders about how this decision affects modern awards. Pay rates in each award will be then updated.
With all these changes, Evolve Online Bookkeeping can help you if you have any enquiry about the wage increase and its application to your bookkeeping. We can assist you on updating your payroll for your affected employees. Contact us today and we will be glad to help you.
If you are a current client of Evolve Online Bookkeeping and we do your payroll, we will contact you once the new rates have been updated in the awards so that we can update your pay rates accordingly.
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