Employer contributions are an important - and mandatory - piece of every worker's superannuation strategy. However, if you happen to be a business owner yourself, this also has an impact on your very own finances.
If you haven't already, it's worth bringing yourself up to speed with your obligations and other basic details when it comes to superannuation.
The super guarantee rate
At the moment, the super guarantee (SG) contribution rate is 9.5 per cent of an employee's income, a change that came about on July 1 2014. However, it won't stay this way. On the same date each year, the rate will rise by 0.5 per cent until it reaches 12 per cent - so it's crucial you keep up with these changes to ensure you're paying your workers the correct amount.
When we talk about an employee's income, this includes:
Eligibility and maximum contribution base
It may not always be clear whether an employee is obliged to receive super contributions - for example, if they happen to be contractors. If you're unsure, you might want to use the Australian Tax Office's SG eligibility tool, which will ask you a series of questions in order to work out if an employee is entitled to payments.
You'll also want to be aware of the maximum contribution base, which determines the highest limit on an employee's earnings base for a given financial year's quarter. For this year, that base is set to $49,430. What that means is you don't need to pay out the minimum support for any part of an employee's income that surpasses this limit.
The default super fund
If your employee hasn't nominated a super fund they would like the SG contributions to go into, it's up to you to choose a default fund to pay into on their behalf. The employee can choose a fund at any point in their employment, but it's up to them to let you know when they have.