Do you wake up at 3am worried about the things that could ruin your business?
One thing every business owner must make sure they have covered so that they can sleep peacefully is to make sure they have correctly paid employees' superannuation entitlements.
Currently, superannuation is at the rate of 9.5% of gross salary and wages and is known as the Superannuation Guarantee Contribution (SGC). The SGC is payable for all full time, part time and casual staff earning over $450 in any calendar month.
The ramifications for not paying superannuation are some of the most serious a business can face.
In the event that an employer doesn’t pay superannuation, employees are able to lodge an enquiry with the Australian Taxation Office. The Australian Taxation Office will investigate the issue and pursue employers to ensure that superannuation entitlements are paid.
There are penalties for employers who do not pay superannuation entitlements and the Australian Taxation Office has wide-reaching powers to ensure payment. This includes making Directors of companies liable personally for the superannuation obligations.
Too often we see employers who do not understand these legal obligations and use employees’ superannuation contributions as a source of cash flow to ensure that the business can continue to operate. This area is a great example of why you need to keep on top of your legal responsibilities as a business owner and have systems in place to ensure you are compliant.
Riley Driscoll is a Business Law and Wills & Estate lawyer at O’Farrell Robertson McMahon. To discuss this or any other matters with Riley, phone her directly on 03 5445 1026 or email her on firstname.lastname@example.org