Avoid penalties by having a default super fund

05 February 2020

Gavel - BUSSQ Super

If your staff don’t choose a super fund you must have a default fund to pay their super into, otherwise you may be financially penalised for not meeting your super obligations.

Employers must pay the Superannuation Guarantee Charge (SGC) penalty if they don’t pay:

  • The required super guarantee contributions for each eligible employee
  • Super contributions by the cut off date for payment, or
  • Super to each employee’s chosen super fund.

  • Late payments can also affect your employee’s insurance cover and investment returns.


    Example

    On their first day at a small concreting business Jack and Billy were given a number of forms Sarah, the Payroll Manager, needed completed to set them up on the payroll system.

    Jack gave all his paperwork to Sarah within a few days, but Billy only returned some of his and didn’t give Sarah his choice of fund form with the details of the fund he wants his super paid to.

    Time came for quarterly super payments and Billy still hadn’t provided his super fund details to Sarah. As the payments were due that day and the company didn’t have a default super fund for Sarah to pay Billy’s super into, she couldn’t pay his super.

    Because the company didn’t pay Billy’s super by the cut off date they may have to pay the SGC financial penalty to the ATO, a payment that is not tax deductible.

    This could easily be solved by the company having a complying default fund like BUSSQ and the details included in the choice of fund form.


    With BUSSQ as your default fund it’s quick and simple to pay super for an employee who hasn’t chosen a fund. Just include the new employee on your clearing house file upload and we will create an account, make payment and let them know they’ve received a payment.

    You can alternatively create a member account for a new employee in EmployerAccess.

    To find out more about choosing BUSSQ as your default fund, contact your BUSSQ Account Manager or call 1800 692 877

    More information on the Superannuation Guarantee Charge and choosing a default fund can be found on the ATO website.

     

     

     

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