As an employer you have to pay superannuation to your employees. If you pay an employee $450 or more (before tax) in a calendar month, you have to pay super guarantee (SG) on top of their wages. There are different rules for employees under 18, domestic workers for example nanny. In some scenarios you have to pay super to some contractors, even if they are working on an ABN.
As per ATO requirements, You have to pay super no matter whether the employee:
- is full-time, part-time or casual
- receives a super pension or annuity while still working – including those who qualify for the transition-to-retirement measure
- is a temporary resident – when they leave Australia, they can claim the payments you made through a ‘departing Australia superannuation payment’
- is a company director
- is a family member working in your business – provided they are eligible for SG.
According to ATO, If you engage someone to do work of a domestic or private nature for 30 hours or more per week and pay them $450 or more (before tax) in a calendar month, you have to pay SG for them. ‘Domestic or private’ means work relating personally to you (not to a business of yours), or work relating to your home, household affairs or family – such as a nanny, housekeeper or carer. If you use funds from the National Disability Insurance Scheme (NDIS) to engage a carer or other domestic help, you may have to pay SG for these workers. This only affects people who choose to manage their NDIS plan themselves.
Business are Not Liable to Pay Super to
- non-resident employees you pay for work they do outside Australia
- some foreign executives who hold certain visas or entry permits
- employees paid under the Community Development Employment Program
- members of the army, naval or air force reserve for work carried out in that role
- employees temporarily working in Australia who are covered by a bilateral super agreement. You must keep a copy of the employee’s certificate of coverage to verify the exemption.
You can always get back to us if you need further information on this issue and seek our assistance on salary sacrifice super arrangement.
For further assistance, please contact Taxplanners on 1300 000 TAX (1300 000 829), 03 9600 0143 (10 Lines).
You can also visit our office for assistance –
Melbourne CBD – Suite 411-413, Level 4, 343 Little Collins Street, Melbourne
Werribee Office – 88 Watton Street, Werribee, Contact – 03 901 MY TAX (03 9016 9829)