Super to be paid with salary

Legislation to require employers to pay their employees’ super at the same time as their salaries and wages has passed parliament.

From 1 July, employers will be required to deposit employees’ super into accounts within seven business days of payday.

While most employers do the right thing, the Australian Taxation Office estimates that $6.25 billion worth of super went unpaid in the recent financial year.

The new law will:

• Require employers to ensure super contributions are received by the employee’s fund within seven business days of payday or they will be liable for the superannuation-guarantee charge
• Help the ATO enforce the law and more quickly identify employers not making contributions, and
• Redesign the superannuation-guarantee charge to be fit for purpose and make Payday Super work.

The ATO will monitor compliance for 12 months after the change. Its approach will differentiate between low and high-risk employers.

Employers that are making an effort to pay contributions in line with pay cycles can fall into a low-risk category.

General Advice Warning
The information provided in this article is for general information purposes only and is not intended to and does not constitute formal taxation, financial or accounting advice. McConachie Stedman does not give any guarantee, warranty or make any representation that the information is fit for a particular purpose. As such, you should not make any investment or other financial decision in reliance upon the information set out in this correspondence and should seek professional advice on the financial, legal and taxation implications before making any such decisions.