Stop Check - Superannuation Guarantee pitfalls

May 2019

Superannuation guarantee can be a complex area.

We are finding that employers are assuming their payroll software is “set-up right” and will calculate the right Superannuation Guarantee amount. This could be a costly assumption!

You are risking penalties and interest charges from the ATO plus unhappy team members.

When, if ever, was the last time someone checked to see if your payroll is setup correctly?

Some common errors and pitfalls often overlooked in the calculation of SG are: 

Penalty Rates

In the instance of workers who attract penalty rates (such as shift workers) in their ordinary hours of work, consideration must be given to the superannuation implications of these. 

These will often fall into ordinary time earnings for that employee and attract superannuation, and therefore a blanket approach to the superannuation treatment of penalty rates must not be adopted.

Leave Loading 

ATO tax rulings confirm superannuation guarantee must include leave loading in the calculation, unless the leave loading basis can be ‘demonstrably referable to a notional loss of opportunity to work overtime’.

It is therefore imperative to reassess your superannuation guarantee calculations and ensure that leave loading and penalty rates are included in superannuation calculations where necessary. 

If you have concerns over the calculation of superannuation, contact your advisor.

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Topics: Business, Superannuation, Small to Medium Business, Personal Income

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