It’s easy to forget the responsibility of managing your superannuation obligations amidst the busy lifestyle of operating a business.

However, those who fail to meet their super obligations risk facing severe and even damaging liabilities.

Before 1 July 2022, employers who pay their workers $450 or more before tax in a calendar month must pay superannuation on top of the employee’s wages.. Now, you must pay super on payments you make to domestic or private workers if they work for you more than 30 hours in a week, regardless of how much you pay them.

The minimum an employer must pay is called the super guarantee (SG).

The SG is 10.5 per cent of an employee’s ordinary time earnings and must be paid at least four times per year. Employers who fail to pay the SG on time may have to pay a super guarantee charge (SGC).

Employees (after entering the workforce) should have a ‘stapled’ super fund that you must pay their super into or the right to nominate a super fund. However, if an employee is not eligible to choose, does not have a fund or fails to notify the employer, the employer must pay their contributions into an employer-nominated or default fund.

The employer-nominated or default fund must be a complying fund (meets specific requirements and obligations under super law) and be registered by the Australian Prudential Regulation Authority (APRA) to offer a MySuper product.

Some super funds may ask that an employer becomes a ‘participating employer’ before they can pay contributions to them. Participating employers may have to make super payments more frequently, such as monthly instead of quarterly.

Employers can claim a tax deduction for super payments they make for employees in the financial year they make them. Contributions are considered paid when the employee’s super fund receives them.

Missed payments may attract the SGC (superannuation guarantee charge). While the SGC is not tax-deductible, employers can use a late payment to reduce the charge or as a pre-payment of a future super contribution (for the same employee), which is tax-deductible