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Re: Superannuation on backpays for Casual employees

Initiate

Views 142

Replies 2

Hi,

 

We are processing backpays for terminated Casual employees due to incorrect Award rates used in previous financial year. 

We know that backpays attract SG.   But we have a tricky situation:

Employee X paid $300 Gross for the month instead $350 Gross.  No SG was calculated previoulsy as the payment was below the threshold.   

If the employee was paid the correct Gross of $350 per month, SG won't be calculated agian.

So when I process the backpay of $50 , do I have to calculate SG on that backpay?

Employee Y worked 10 hrs per month and was paid $250 instead of $256.80 for those 10 hours. 

The backpay that we have to pay is $6.80 only. Do we have to calculate SG on the  backpay? 

Both employees are over 18 yrs of age.

And if we have to pay SG on a backAYdo we have to calculate an interest on SG  ?

 

Please advise. 

 

 

 

 

 

1 ACCEPTED SOLUTION

Accepted Solutions

Most helpful response

Devotee Registered Tax Practitioner

Replies 1

If the employee was paid the correct Gross of $350 per month, SG won't be calculated agian.

So when I process the backpay of $50 , do I have to calculate SG on that backpay?

 

If the total backpay for that employee amounts to $450 or more, then super needs to be paid.

The test is for the month when the payment was made, not when it should have been made.

 

Employee Y worked 10 hrs per month and was paid $250 instead of $256.80 for those 10 hours. 

The backpay that we have to pay is $6.80 only. Do we have to calculate SG on the  backpay? 

 

If the total backpay for that employee amounts to $450 or more, then super needs to be paid.

The test is for the month when the payment was made, not when it should have been made.

 

And if we have to pay SG on a backAY do we have to calculate an interest on SG  ?

 

Only if you are paying on a SGC return, and not paying directly to the employee's super fund.

 

 

 

2 REPLIES 2

Most helpful response

Devotee Registered Tax Practitioner

Replies 1

If the employee was paid the correct Gross of $350 per month, SG won't be calculated agian.

So when I process the backpay of $50 , do I have to calculate SG on that backpay?

 

If the total backpay for that employee amounts to $450 or more, then super needs to be paid.

The test is for the month when the payment was made, not when it should have been made.

 

Employee Y worked 10 hrs per month and was paid $250 instead of $256.80 for those 10 hours. 

The backpay that we have to pay is $6.80 only. Do we have to calculate SG on the  backpay? 

 

If the total backpay for that employee amounts to $450 or more, then super needs to be paid.

The test is for the month when the payment was made, not when it should have been made.

 

And if we have to pay SG on a backAY do we have to calculate an interest on SG  ?

 

Only if you are paying on a SGC return, and not paying directly to the employee's super fund.

 

 

 

Initiate

Replies 0

Thank you so much for your great response Bruce4Tax!