Under superannuation law, you must make superannuation guarantee (SG) payments into your eligible employees’ chosen super fund. However, under COVID-19, things are different and it is important to understand how the SG rules apply in your current situation.
From 30 March 2020, the Government is providing eligible employer and sole traders with JobKeeper payments to enable them to pay their employees during the COVID-19 pandemic. Employers can apply through the ATO’s Business Portal or MyGov (for sole traders) and, if approved, will then receive $1,500 per eligible employee each fortnight. Note there has been an extension so that JobKeeper applications for the initial pay periods can be made until 31 May 2020.
Do I still have to pay SG contributions?
Yes, your SG obligations still apply to each payroll you complete, and the contribution deadlines apply as usual.
What if I am receiving JobKeeper subsidies for some or all of my employees?
You will need to pay super as usual for your employees’ usual earnings, whether they are paid by you or with help from JobKeeper payments.
For those eligible employees who would earn less than $1,500 a fortnight, you must pay super calculated on their usual salary/wages and can choose to pay super for any additional amounts covered by JobKeeper. For example, if Charles would typically get $1,200 a fortnight plus $114 super, he will now receive $1,500 per fortnight and you must contribute at least $114 to his super fund – or you can contribute 9.5% of the full $1,500 if you want.
Does the early release super rule impact on me as an employer?
Not directly – it is just allowing members to withdraw some super early in certain circumstances.
However, if members withdraw all their super from a fund, their account may close. In this case, your employees may ask you to contribute to a different super account (see our Managing employee choice instructions fact sheet for details on accepting such choices). Given that people may need to change funds now due to account closures and consolidations, you may want to accept choice of fund requests even if the employee has made a choice within the last 12 months.
If a member does not ask you to change funds after an account is closed, the fund may return your contributions and you will need to give your employer a Standard choice of fund within 28 days.
I’m self-employed – does it affect my super?
As a sole trader, you do not have to pay to yourself unless you are registered as an employee of the business. So whether you get the JobKeeper payment or not, making super contributions on your own behalf remains optional but remember that any contributions you do make can be claimed as a tax deduction.
AvSuper is a profit-for-members, MySuper-compliant super fund dedicated to the aviation industry. This information is of a general nature only and does not take into account your personal objectives, situation or needs. Before making a decision about AvSuper (ABN84 421 446 069), you should consider your own requirements and the relevant Product Disclosure Statement. For a copy or to discuss your super, call 1300 128 751 or visit www.avsuper.com.au.