Understanding Superannuation

In Australia, employers are required to contribute to superannuation funds on behalf of the eligible employees within their organization. Superannuation funds are retirement funds to which employers and employees can contribute. The contributions in these funds are available to employees after they retire.

Superannuation funds are regulated by the Australian Tax Office (ATO). Currently, employers are required to contribute an amount equal to nine percent of an eligible employee's earnings into an approved superannuation fund on behalf of each eligible employee. Employees are eligible for superannuation fund contributions if their monthly earnings are above a specified amount. Employees and employers can make additional contributions to the funds.

Employers are required to contribute to employee superannuation funds on at least a quarterly basis.

Employers that make contributions to an employee's superannuation fund are required to:

• Keep records of all contributions that are made.

• Report details of the contribution to employees at least once per quarter.

• Record when, what, and how information was reported to employees.

The ATO requires employers to report information to employees so that employees are aware of how much superannuation funding has been paid on their behalf, and where that money has been invested. The ATO can assess monetary penalties to employers who do not report this information to employees. The format that you use to report information to employees is not mandated by the ATO; however, you must include:

• The amount of the employer contribution that was made on the employee's behalf.

  The ATO requires employers to report all contributions that are paid into the fund, including amounts above the required nine percent.

• The name of the superannuation fund provider, and if possible, the provider's phone number.

• The employee's account or membership number with the superannuation fund provider, if known.

  Note: All of the information in this documentation is current at the time of publication. However, because tax laws and regulations change periodically, you should not rely on this documentation as the primary source of information for superannuation regulations that are defined by the ATO. You should contact the ATO directly for information such as contribution and record- keeping requirements, reporting dates and policies, employee eligibility, and penalties.