Superannuation due

This is a reminder to process the superannuation payments for the December 2020 quarter.

The due date is 28 January 2021 however that is the date that the funds must have cleared in the superannuation fund which means you need to process the payment at least a few days before, and ideally a week prior, just in case. 

So we recommend processing the payment by Thursday 21st January 2021.
 

Why is superannuation compliance so important?

Superannuation payments must be paid on time and reach the superannuation funds by the 28th day following the month or quarter end. If the payment does not reach the superannuation funds, the superannuation may not be claimed as a tax deduction. Ouch! 
 

How does the ATO know the superannuation hasn't been paid on time?

Now that payroll information must be lodged through Single Touch Payroll (STP), the ATO have transparency of the wages and the superannuation owing. The ATO system data-matches the superannuation payments against the employee records so if superannuation is paid late, it gets flagged by the ATO as non-compliant.
 

Using Xero auto-superannuation?

If you use Xero and you have enabled the auto-superannuation feature (you may have to upgrade the subscription to have this enabled), it is by far the easiest way to process superannuation. Below are the steps to follow:

1. Check that all payruns have been processed

2. Check that there are no STP lodgements outstanding

3. Check the 'Wages Payable' account is nil

4. Check all employee superannuation details are entered in Xero

5. Run the Superannuation Accruals report for the month or quarter

6. Go to Payroll --> Superannuation --> +Add Super Payment

7. Tick the lines that are owing (for the relevant month or quarter)

8. Check the total at the top equals the Superannuation Accruals report

9. Click on 'Submit for approval'

10. You should receive the approval code via email and text message

11. Go back into the superannuation section, find the batch to approve, add the code and Approve

12. The Xero superannuation clearing house will then automatically process the money from the business bank account and pay the individual superannuation funds for you.

Using the ATO Superannuation Clearing House?

If you only have one or two employee’s superannuation to pay or you don't have a system that processes the auto-superannuation, you can use the ATO Superannuation Clearing House.

All you need to do is go into the ATO Business Portal and look for the Superannuation section. Set up each employee then lodge the superannuation in there. You will have to manually add each employee's superannuation in the lodgement.

Once lodged, you can download the final lodged report and you will find the payment details on there. Finally, pay the superannuation to the payment details provided (you will have to do this through your internet banking).
 

Personal superannuation contributions

If you don't have employees or perhaps you are not an employee of your business (e.g. sole traders, trust beneficiaries), you should still consider making personal superannuation contributions. The contributions may be claimed as a tax deduction.

If your marginal tax rate is more than 15% (if you earn more than $45,000 per annum), then it is tax effective to make personal superannuation contributions because the superannuation fund only pays tax at 15%. What that means is that less money goes to the ATO in tax and that tax saving can be used to grow your superannuation investment portfolio over time. When you compound out the tax saving and the returns earned over many decades, it can add up to hundreds of thousands of wealth by the time you retire.

Conditions and caps apply to personal superannuation contributions.
 

Reach out if you have any questions, want to know more or whether you could benefit from our regular superannuation processing service priced from $110 per batch