A Super Guarantee Agreement: Understanding the Basics for Employers
As an employer, it is your responsibility to ensure that your employees receive their correct entitlements. One of these entitlements is the Superannuation Guarantee (SG) which is a compulsory contribution made to an employee`s chosen super fund.
To ensure you meet your obligations, it is important to understand the terms and conditions of a Super Guarantee Agreement (SGA).
What is a Super Guarantee Agreement (SGA)?
A SGA is a written agreement between an employer and an employee that outlines the terms and conditions of the SG contributions. This agreement must be made before the employee`s first SG contribution is due and must be kept for at least five years.
What is included in a Super Guarantee Agreement?
A SGA must contain the following information:
– The amount of SG contribution to be made
– The frequency of the contributions (monthly, quarterly or annually)
– The date payment is due
– The employee’s superannuation fund details
– Any applicable penalty for late payment or non-payment
It is important to note that if a SGA is not in place, the employer can be subject to substantial penalties.
Can a Super Guarantee Agreement be modified?
Yes, a SGA can be modified. However, any changes must be made in writing and agreed upon by both the employer and employee. These changes should also be kept for at least five years.
What happens if an employee changes super funds?
If an employee changes their super fund, the employer must update the SGA accordingly. As an employer, it is important to keep track of any changes in your employees` super fund details.
What are the benefits of having a Super Guarantee Agreement?
Having a SGA in place helps to ensure that both parties understand their obligations and reduces the risk of errors or disputes. Additionally, a SGA provides a clear record of SG contributions made and can be used as evidence in any disputes or legal proceedings.
In conclusion, understanding the basics of a Super Guarantee Agreement is crucial for employers to meet their obligations and avoid penalties. By having a SGA in place, both employers and employees can have peace of mind that SG contributions are being made correctly and on time.