{"id":2414,"date":"2021-04-19T07:29:20","date_gmt":"2021-04-19T07:29:20","guid":{"rendered":"https:\/\/whiz-consulting.com\/au\/blog\/easy-way-to-tackle-super-funds-for-small-business\/"},"modified":"2025-02-12T13:02:33","modified_gmt":"2025-02-12T13:02:33","slug":"easy-way-to-tackle-super-funds-for-small-business","status":"publish","type":"post","link":"https:\/\/www.whizconsulting.net\/au\/blog\/easy-way-to-tackle-super-funds-for-small-business\/","title":{"rendered":"Easy Way to Tackle Super Funds for Small Business"},"content":{"rendered":"<p>Human resource is a vital part of any organisation, especially for those involved in\u00a0the\u00a0labour-intensive business. Thus,\u00a0payroll\u00a0management is a must. Being an Australian business, there are many payroll compliances you must adhere to,\u00a0and one such aspect you must pay attention to is superannuation.\u00a0Superannuation is money you pay to ATO on behalf of your workers to provide for their retirement.\u00a0<a href=\"https:\/\/www.whizconsulting.net\/au\/services\/payroll-outsourcing-services\/\">Outsourced payroll providers<\/a>\u00a0can be of great help in ensuring that you adhere to\u00a0all such compliances\u00a0on time.<\/p>\n<p>If you payA$450 or more\u00a0before tax in a calendar month,\u00a0then you will have to pay super for that employee.\u00a0You are obligated to pay superannuation to employees under\u202f18 as well as\u202fa private or domestic worker who works for more than 30\u202fhours per week.\u00a0You must pay\u00a0Super Guarantee (SG),\u00a0which a minimum an\u00a0employer must pay. At present,\u00a0Super Guarantee (SG)\u00a0is\u00a09.5% of an employee\u2019s ordinary time earnings.\u00a0You must understand\u00a0your\u00a0superannuation obligation as an employer.<\/p>\n<p>Even if you are a sole trader or in a partnership, it is a good way to save up for your retirement. In fact, you might be able to claim a full deduction for contributions\u00a0you make if it is under the contribution limit threshold.<\/p>\n<p>Superannuation can be of great help not for just employees and\u00a0self-employed\u00a0personal but\u00a0even contractors with Australian Business Number (ABN) are eligible for a superannuation guarantee.<\/p>\n<p>The super is put in a super fund. There are\u00a0a\u00a0wide variety of super funds. As\u00a0an\u00a0employer, you\u00a0must\u00a0provide\u00a0an\u00a0eligible employee\u00a0with a\u202f\u201cStandard choice\u202fform\u201d that will help you know about their preferred super fund.\u00a0It is important to understand different types of super funds as an employer or a self-employed individual to understand what will work out best. There are two types of super funds: defined benefit funds and accumulation funds.<\/p>\n<p aria-level=\"3\">In accumulation funds,\u00a0the contributed money grows or\u00a0\u2018accumulates\u2019\u00a0over time.\u00a0Most funds are accumulation funds. In defined benefit funds, the retirement benefit is determined by a formula.\u00a0Most defined benefit funds are corporate or public sector funds. Many are now closed to new members.\u00a0Typically,\u00a0the retirement\u00a0benefit is calculated using:<\/p>\n<ul>\n<li data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"1\" aria-setsize=\"-1\" data-aria-posinset=\"1\" data-aria-level=\"1\">the money put in by you and your employer<\/li>\n<li data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"1\" aria-setsize=\"-1\" data-aria-posinset=\"2\" data-aria-level=\"1\">your average salary over the last few years before you retire<\/li>\n<li data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"1\" aria-setsize=\"-1\" data-aria-posinset=\"2\" data-aria-level=\"1\">the number of years you worked for your employer<\/li>\n<\/ul>\n<p>Employees\u00a0must think carefully if\u00a0they\u00a0want to leave a defined benefit fund. Defined funds are mostly very generous\u00a0with the retirement benefit\u00a0and do\u00a0not allow to\u00a0re-join\u00a0in case one leaves it. Super funds\u00a0can\u00a0also be\u00a0categorised in\u00a0retail, industry, public sector or corporate.\u00a0As an\u00a0employer, you will be using\u00a0MySuper\u00a0Account as a default account if\u00a0the\u00a0employee does\u00a0not choose a fund for themselves.\u00a0MySuper\u00a0accounts typically\u00a0have\u00a0lower fees,\u00a0simple features\u00a0and\u00a0are\u00a0either a\u00a0\u2018single diversified\u2019\u00a0or a\u00a0\u2018lifecycle\u2019\u202finvestment.<\/p>\n<p aria-level=\"5\">Not every employee is entitled to choose their own super fund,\u00a0and\u00a0they must be eligible to choose\u00a0their super fund. Eligibility criteria are &#8211;<\/p>\n<ul>\n<li data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"8\" aria-setsize=\"-1\" data-aria-posinset=\"2\" data-aria-level=\"1\">They must be employed\u00a0under an award\u00a0or\u00a0agreement\u00a0that states that they do\u00a0not require super support<\/li>\n<li data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"8\" aria-setsize=\"-1\" data-aria-posinset=\"3\" data-aria-level=\"1\">They must be\u00a0employed under an enterprise agreement or workplace determination made on or after 1\u00a0January 2021<\/li>\n<li data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"8\" aria-setsize=\"-1\" data-aria-posinset=\"3\" data-aria-level=\"1\">They should\u00a0not\u00a0be\u00a0employed under any state award or registered agreement<\/li>\n<\/ul>\n<p>You don\u2019t need to offer a choice of fund to employees\u00a0if the employee is on a temporary working visa or their\u00a0superannuation fund\u00a0is\u00a0undergoing\u00a0a merger or acquisition.\u00a0In\u00a0the\u00a0case of existing\u00a0eligible employees, they can\u00a0change their choice of\u00a0the\u00a0fund as often as they want. However,\u00a0you only have to accept a new choice from them once in any 12-month period.\u00a0You need to keep\u00a0a\u00a0record of\u00a0copies\u00a0of the completed\u202fStandard choice form\u202for ATO online printed summary\u00a0for\u00a0five years.<\/p>\n<p>Provided there are\u00a0various\u00a0types of super funds options available for employees out there,\u00a0and\u00a0it might become\u00a0stressful\u00a0for you to\u00a0process the right contribution to\u00a0the\u00a0respective employee. This issue could be solved with the help of\u00a0the\u00a0Small Business Superannuation Clearing House (SBSCH). It\u00a0is a free service\u00a0by\u00a0the\u00a0Australian Taxation Office (ATO),\u00a0which\u00a0you can use to make super guarantee (SG) contributions.\u00a0As the name suggests\u00a0it is eligible for small business, meaning only business with\u00a0an annual aggregated turnover of less than\u00a0A$\u00a010\u202fmillion\u00a0or 19\u202for\u202ffewer employees or\u00a0can opt for this service.<\/p>\n<p>With the help of SBSCH,\u00a0you can pay your SG contributions as a single electronic payment. The SBSCH then\u00a0further\u00a0distribute the payments to each employee\u2019s super fund. Your\u00a0super guarantee\u00a0obligations are met as soon as your payment and instructions are accepted by the SBSCH.\u00a0Another plus point is that\u00a0SBSCH is\u00a0SuperStream\u00a0compliant.\u00a0A few things\u00a0you must make to double-check for errors are \u2013<\/p>\n<ul>\n<li data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"24\" aria-setsize=\"-1\" data-aria-posinset=\"1\" data-aria-level=\"1\">Unique Superannuation Identifier (USI)<\/li>\n<li data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"24\" aria-setsize=\"-1\" data-aria-posinset=\"2\" data-aria-level=\"1\">Australian Business Number (ABN) if applicable<\/li>\n<li data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"24\" aria-setsize=\"-1\" data-aria-posinset=\"3\" data-aria-level=\"1\">Bank account<\/li>\n<li data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"24\" aria-setsize=\"-1\" data-aria-posinset=\"4\" data-aria-level=\"1\">Electronic service address<\/li>\n<li data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"24\" aria-setsize=\"-1\" data-aria-posinset=\"5\" data-aria-level=\"1\">Super fund member account number<\/li>\n<li data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"24\" aria-setsize=\"-1\" data-aria-posinset=\"5\" data-aria-level=\"1\">Fund name<\/li>\n<li data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"24\" aria-setsize=\"-1\" data-aria-posinset=\"5\" data-aria-level=\"1\">Payment\u00a0Reference\u00a0Number\u202f(PRN),\u00a0match\u00a0it\u00a0with\u00a0your payment instructions<\/li>\n<\/ul>\n<p>You can nominate someone\u00a0on your behalf to use the\u00a0SBSCH on your behalf, and it could be your bookkeeper or payroll professional. Hiring\u00a0payroll services online\u00a0can also be an alternative. The number of complexities will only increase with the growth of your business. Also, if you have more than 19 employees or have more than A$ 10 million\u00a0annual aggregated\u00a0turnover,\u00a0then you will not be able to make use of SBSCH. If you are stuck in a similar position and want assistance with your payroll processing, we will assist you with your payroll processing. Contact today to talk to our payroll experts.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Human resource is a vital part of any organisation, especially for those involved in\u00a0the\u00a0labour-intensive business. Thus,\u00a0payroll\u00a0management is a must. Being an Australian business, there are many payroll compliances you must adhere to,\u00a0and one such aspect you must pay attention to is superannuation.\u00a0Superannuation is money you pay to ATO on behalf of your workers to provide&hellip; <a class=\"more-link\" href=\"https:\/\/www.whizconsulting.net\/au\/blog\/easy-way-to-tackle-super-funds-for-small-business\/\">Continue reading <span class=\"screen-reader-text\">Easy Way to Tackle Super Funds for Small Business<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":3120,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[49],"tags":[],"class_list":["post-2414","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-payroll","entry"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.whizconsulting.net\/au\/wp-json\/wp\/v2\/posts\/2414","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.whizconsulting.net\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.whizconsulting.net\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.whizconsulting.net\/au\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.whizconsulting.net\/au\/wp-json\/wp\/v2\/comments?post=2414"}],"version-history":[{"count":0,"href":"https:\/\/www.whizconsulting.net\/au\/wp-json\/wp\/v2\/posts\/2414\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.whizconsulting.net\/au\/wp-json\/wp\/v2\/media\/3120"}],"wp:attachment":[{"href":"https:\/\/www.whizconsulting.net\/au\/wp-json\/wp\/v2\/media?parent=2414"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.whizconsulting.net\/au\/wp-json\/wp\/v2\/categories?post=2414"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.whizconsulting.net\/au\/wp-json\/wp\/v2\/tags?post=2414"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}