Employer is not paying superannuation
Superannuation allows Australian employees to save for their retirement over the course of their working life. It is compulsory for employers to contribute to an employee’s superannuation fund. However, it is estimated by the Australian Taxation Office (ATO) that up to 20% of businesses are non-compliance with their superannuation obligations.
This article will discuss what superannuation is, how you can tell if your superannuation is being paid, and what to do if your employer is not paying you superannuation.Employer is not paying superannuation#knowyourrights#getpaid Click To Tweet
What is superannuation?
Superannuation, or ‘super’ is money put aside by your employer over the course of your working life. It will provide you with an income stream on which to live when you retire. This money lives in a superannuation fund, and can only be accessed in certain circumstances.
For most people, your employer will pay super contributions into a super account of your choice. They will do this for you, and will pay it on top of your salary and wages. Your employer must pay these contributions if you work casual, part-time or full-time hours, and if you are a temporary resident of Australia.
If you are an independent contractor, you may be responsible for paying your own superannuation. You should speak to your accountant about this. Unsure about your employment status go to Check my employment contract
An employer is required to pay a minimum amount of 9.5% of your ordinary time earnings into your superannuation fund.
For example, if you earn $100,000 per annum, your employer is required to pay a minimum of $9,500 into your superannuation.
Some employers may pay a higher rate than this. You can also elect to contribute more to your superannuation.
How can I tell if my superannuation is being paid?
Employees should be vigilant about ensuring they are paid superannuation correctly. Doing so will protect your retirement income, and ensure you are being paid what you are entitled to.
The first step is to ensure you confirm with your employer if they are paying your superannuation, into which fund they are paying it, and how much money they are paying. Your payslip should also state the contribution the employer is making to your elected fund.
You can also contact your superannuation fund to confirm whether your employer has paid your superannuation.
What do I do if my employer is not paying superannuation?
Many employers do not make superannuation obligations in a timely fashion. Other employers fail to make payments at all. This is particularly the case where an employer is experiencing financial problems.
After confirming with your super fund that your superannuation has not been paid, you should contact the ATO to let them know. You can use the ATO’s online reporting tool – ATO – report unpaid super
If the ATO concludes that your employer has not paid the minimum amount of superannuation into an employee’s fund by the due date, an employer may have to pay the super guarantee charge. This charge includes:
- All super shortfall amounts;
- Interest on those amounts (currently 10%); and
- An administration fee
The ATO can also take stronger action including issuing director penalty notices and garnishee notices.The ATO is also entitled to disclose an employer’s non-compliance to all affected employees, even if they have not lodged an enquiry with the ATO.
Over the past few years the Senate Standing Committees on Economics have undertaken investigations into the concerning amount of superannuation that employers fail to pay. The Senate has found that the failure to pay superannuation will cause long-term detriment to millions of Australians and future governments.
In response to these investigations, the Commonwealth Parliament introduced legislation in May 2018 to provide a one-off 12-month amnesty to correct historical cases of employee superannuation underpayment or non-payment.
This legislation would encourage employers to voluntarily disclose their non-compliance, and for payment to be made without any penalties or fees that would usually apply to non-compliance. These amendments would also see the ATO given more power to ensure the correct payment of superannuation.
Unfortunately this legislation was not passed before Parliament concluded sitting in April 2019, before the 2019 Federal Election.
All employees should understand their entitlement to be paid superannuation, and should ensure that they are being paid by their employer’s appropriately.
If you discover that your employer is not paying superannuation, you should report this to the ATO as soon as possible, who will investigate the issue and act accordingly. Assistance from the ATO is free and will benefit any other employees who have also been underpaid.