How to pay super in xero

How to pay super in xero, well this is pretty easy if you know where to look.

Firstly, we need to start by setting up the super company in the settings, in xero go to settings – payroll settings.

Next go to the superannuation section.

Add in our first super company.

Choose either a regulated superfund or a self-managed superfund.

Seach for the company using the USI number and add it in.

Don’t forget to add in the super company to our employee’s card file under the employment section.

Once a pay run has been finalized and we have super figures to pay then we are free to pay the super.

Go to payroll – superannuation and follow the get started steps to set up the super.

Now that you are in you can create a batch payment.

Xero will automatically take the money out of your account and distribute this to your employees.

Now that you know how to pay super in xero, let’s find out what happens when you don’t pay your super….

 

What is an SGC Statement, how to lodge it, Major issues, and is this a bookkeepers job?

SGC is a Super Guarantee charge, this relates to unpaid superannuation and the ATO are trying to help the retired use the super they have earned when they need it the most.

What is the purpose of an SGC Statement?

The ATO have a law in place that forces employers to pay super on time.

Usually this is on a quarterly basis but in a few years, it will switch to weekly.

If an employer pays super late even by one day, then you must lodge an SGC Statement with the ATO.

 

What happens if you don’t lodge this and if you pay the super late?

If super is paid late then the ATO require you to pay the employee interest on these amounts,.

They will ask you to fill out a form listing all employees, total super owed, and if they have been paid.

Once lodged they will determine the interest payable to the employee.

If this isn’t lodged the ATO can hand out a director fine, extra interest payable to the ATO, and administration fees, this all adds up to quite a hefty amount.

The best way to avoid this is to pay the super on time.

If you are unsure what Payroll is or if you need more information, please see Payroll – Clients Needs Bookkeeping or contact us at Contact Us – Clients Needs Bookkeeping to help you with your payroll and super obligations.

Is this a job of a bookkeeper or a Tax Agent?

Well, this is better suited to a bookkeeper as they handle the more intricate details of a business and help with super obligations on more frequent basis.

A Tax agent only handles end of year items so they may not be all over this.

On another note, this is also quite complicated to handle and may even be better suited to a BAS Agent, we will show you how it all works now.

This is how we handle the SGC Statements in MYOB and XERO

MYOB AccountRight Plus is the best system for this,

1. Firstly, create a new liability account called “Super Guarantee A/c” and make this a credit card type.
2. Next go into Pay Liabilities, this will show you your total super owed for a period, pay this super from the bank account which you created in step 1.
3. Also compare the previous step with the payroll summary to determine who was owed super, who was paid super, and who you still owe these are necessary for the SGC Statement.
4. Fill out the SGC Statement and request either your BAS Agent or TAX Agent to upload this to the ATO Portal.

 

MYOB Lite / Pro and Browser versions,

Unfortunately, MYOB Browser doesn’t have a system like AccountRight.

We are unable to mark off what super has been paid, and we need to keep manual records or just remember that the super was lodged with the ATO.

Xero is a mix of both businesses,

1. Log into Xero and go to the menu Payroll – Superannuation- add super payment
2. Choose the super that you are lodging with the SGC Statement. Tick all the boxes and click the mark as paid button.
3. Find the report “Superannuation accruals” and use the above steps to determine total super and owed super.
4. Create a “Super Guarantee A/c” as a liability and create another account to offset called “Super Payable – ATO”
5. Create a General Journal with these two accounts for the SGC Statement amount. This will show your accountant what has happened so he can reconcile properly.

 

Unfortunately, the ATO have only made the Super Guarantee A/c available to Tax Agents only.

This means BAS Agents are unable to make sure the SGC Statement lodgment has gone through.

So, they may need to liase with the tax agent or just hope the ATO system works, (which it usually does).

What other issues are there?

 

One major issue with this system is that super can be very easily double paid.

If the bookkeeper fails to mark the super as paid in MYOB AccountRight or Xero

Or if they forget about the lodgements In the MYOB Browser, they may double pay the super.

The ATO have BPAY details in which you need to send the payments to.

They will then distribute the funds in a random order

So paying from your clearing house isn’t possible once the SGC Statement has been lodged.

Once you double pay the super, this creates a giant mess, and you have to short pay future super amounts as the ATO will not refund this payment.

We at www.clientsneeds.com.au have been in discussions with the ATO and they are now very aware of this issue.

One can only hope they will fix this so there are no double payments.