Superannuation Obligations for Business Owners

Yes. The Superannuation Guarantee (Administration) Act says that employers do not have to pay the Superannuation Guarantee in certain circumstances, for example:

• employees earning less than $450 per month;
• employees under the age of 18 who work less than 30 hours per week;
• employees over the age of 70;
• certain employees who are not resident in Australia and are paid for work outside of Australia.

All employers must tell the Tax Office every year about the contributions that have been made for employees. The Tax Office can audit the employer's accounts, and charge interest on any outstanding payments, plus administrative fees.

An employer can make payments above the compulsory superannuation guarantee as:

• a reward for a worker's performance;
• a type of co-payment, where the employer's contribution increases in line with the employees voluntary contribution; or
• a "salary-sacrifice" - this is where the employer makes a contribution that would otherwise be paid as salary.

Note: There are contribution limits. Contributions above these limits may not be tax effective. You may want to suggest to an employee that they get financial advice before extra superannuation contributions are made.