When a new employee commences work for your business it is important to be fully aware of your super obligations as an employer, and what you need to do in order to comply.

By definition, an ‘employee’ is anyone who receives a salary or wage in return for their labour or services. However, for superannuation purposes, the term ‘employee’ may be expanded to also include:

• contractors

• family member/s of the employer who work in the firm

• director/s of a business

There are definitive tests that can be applied to determine whether your worker is an employee or a contractor.

Generally speaking, employees are eligible to receive super contributions if they:

• work full time, part time, or on a casual basis

• are aged between 18 and 70, and

• are paid $450 (before tax) or more in a calendar month

Certain visas also allow for some temporary residents to be eligible to receive super contributions.

It is highly likely that you will need to make super payments for contractors who are paid under a contract that is wholly or principally for labour, even if the worker quotes an Australian Business Number (ABN). A contract is considered to be principally for labour if more than half of the dollar value of the contract is for the person’s labour, such as artistic, mental or physical effort.

Conversely, there are some employees who may be considered exempt from receiving the standard super contributions. Employees who satisfy the below criteria are not eligible to receive super payments:

• under 18 years of age and work 30 hours or less per week

• paid less than $450 ( before tax) in a calendar month

• a foreign executive who holds certain visas or entry permits under the migration  regulation

• paid to do work of domestic or private nature for no more than 30 hours a week, such as a nanny for example

• temporarily working in Australia for an overseas employer and covered by a bilateral social security agreement . In this instance, a Certificate of coverage must be shown to receive the exemption