Whether it’s relaxing on a new veranda on a balmy Australian night, travelling the world sipping the best wine, or buying a caravan and driving through the desert – retirement sure sounds like bliss! However, a recent report from industry super fund Cbus indicates that more than 700,000 Australian workers are currently being deprived of their full superannuation guarantee, putting the Aussie dream of a comfortable retirement out of reach for many.
The report found that up to 7% of the Australian workforce are not having the appropriate compulsory superannuation payments paid to their nominated super fund. This means that the total superannuation payments made for the Australian workforce is currently falling short by almost $2.6 billion a year.
The report pinpoints construction as the worst effected industry with property services, hospitality, mining and manufacturing industries close behind.
So what are the reasons?
Put simply, some employers are turning a blind eye to this obligation, with non-compliance stemming from cash flow problems. Other reasons include sham contracting and employer insolvency.
A quick reminder: What’s the obligation?
Most employers are expected to pay the minimum superannuation contribution of 9.5 per cent to all employee’s (including casuals) where they earn more than $450 in a calendar month. Payments are to be made at least once every three months. Those of you who have employees under the age of 18 must pay super if they work at least 30 hours a week and earn more than $450 in a calendar month.
Employers must also report super payments to the Australian Tax Office (ATO). You should be aware that if you don’t meet your super guarantee obligations, the ATO may issue a range of hefty penalties or charges on top of the super guarantee charge. So getting in the way of those retirement dreams may be costly for you and your business.
For more information about your superannuation obligations clients should contact the HR Assured team. If you’d like more information about the benefits of becoming an HR Assured client contact us today for an informal chat.