Are your employees eligible for super payments?

Superannuation can be quite complicated. In essence employers must pay 9.5% of each eligible worker’s ordinary time earnings each quarter. According to the Australian Tax Office, ordinary time earnings (OTE) is usually the amount your employee earns for their ordinary hours of work. It includes things like commissions, shift loadings and allowances, but doesn’t include overtime payments.

For contractors, the labour component of their contract is the basis for their OTE and it is when contractors are thrown in the mix that things become complicated.

The ATO states that if you pay your contractors under a contract that is wholly or principally for labour, you are required to pay super contributions for them, even if the contractor quotes an Australian Business Number (ABN). These contractors are your employees and you must treat them as such, regardless of the service they are providing.

When do I pay Superannuation?
If an employee earns $450 or more (before tax) in a calendar month, you have to pay a super guarantee on top of their wages.
If your employee is under 18 or is a private or domestic worker they must work a minimum of 30 hours to qualify for superannuation payments.

You are required to pay super regardless of whether the employee:

• is full-time, part-time or casual
• receives a super pension or annuity while still working – including those who qualify for the transition-to-retirement measure
• is a temporary resident – when they leave Australia, they are entitled to the payments you made through a ‘departing Australia superannuation payment’ claim
• is a company director
• is a family member working in your business – provided they are eligible for a super guarantee (SG)

When not to pay Superannuation
Those who are not eligible for a SG include:

• non-resident employees you pay for work they do outside Australia
• some foreign executives who hold certain visas or entry permits
• employees paid under the Community Development Employment Program
• members of the army, naval or air force reserves for work carried out in that role
• employees temporarily working in Australia who are covered by a bilateral super agreement.

You must keep a copy of the employee’s certificate of coverage to verify the exemption.

What Do Employees Want Most: Better Health Benefits or More Vacation Time?

Besides more money, what other perks do employees really want? To answer that age-old question, Accountemps recently surveyed 320 employees and 2,100 CFOs across 20 of the largest US cities. The results were unexpected.
Almost half of the CFOs (41 percent) who responded to the survey said their employees wanted better benefits. Only 19 percent thought their employees wanted more vacation time.
But, surprisingly, 30 percent of employees surveyed said they preferred having more time off.
“Employers might assume that with the passage of the Affordable Care Act and healthcare benefits being front and center that [better benefits] is the most in-demand perk,” said Bill Driscoll, district president for Accountemps, a division of Robert Half that specializes in providing temporary staffing services for accounting, finance, and bookkeeping professionals. “However, managers shouldn’t assume they know what their employees want.”
Driscoll advises managers to ask their team members about which workplace perks are most meaningful to them.
“If you’re not offering those incentives that rank highest on their wish list, your efforts to motivate or retain workers could fall flat,” Driscoll said.
With the economy and job market improving, certainly for accounting and finance professionals, Driscoll said more companies are offering additional vacation days and paid time off.
“Many companies evaluate their compensation, benefits, and perks to remain competitive, as the economy improves and the war for talent heats up,” he noted. “Offering additional vacation time shows employees that you’re committed to helping them achieve greater work-life balance.”
As a manager himself, Driscoll said he tries to set a good example for his employees. He’s already planning a vacation this year to Italy with his family, and he is encouraging his employees to make sure they are using their vacation time to recharge their batteries.
“Vacation days allow employees to take much-needed breaks from work to relax, recharge, and come back with renewed energy and enthusiasm for their job,” Driscoll said. “Both employees and companies benefit when workers are happy and well-rested.”