If you own small businesses, you need to make sure that you meet all the ATO SuperStream requirements before you can contribute to your employees’ superannuation accounts. You can do this by using a Superannuation Clearing House, like Nationwide Super, to pay all employees in one online session. Whether you have one employee or 100, you can choose what is right for you.
Contribution splitting
One of the most popular types of contribution splitting is spouse contributions. It allows you to build a super account together while still making contributions after tax. It can be a great way to protect your partner’s super while on parental leave. Contributions are tax-effective and help equalise the balances between spouses, and can also be very beneficial for small businesses operating in different locations.
The new law allows couples to split their contributions. However, there are restrictions, such as the amount of concessional contributions that can be split. The limit for splittable contributions is 85% of the total concessional contributions for the financial year. The limit is higher for married or having a family with a de facto income. You can split your contributions up to the amount of 85 per cent of your deductible contributions.
Aside from spouse contributions, a couple can also split their super to ensure that both members enjoy the same benefits. Contribution splitting can help even out the superannuation balances between spouses, providing a peace of mind to their spouses. It can also help cover the cost of insurance. When done properly, contribution splitting is a valuable part of a successful retirement.
Tax advantages
Employers must also contribute to their employees’ super. Currently, the superannuation guarantee is 9.5 percent of ordinary time earnings. The employer must calculate the amount of super a member will receive based on the employee’s salary and other compensation, including commissions, shift loadings, bonuses, and allowances. If an employee works less than 40 hours a week, back-pay counts towards the employee’s super but does not need to be included in the super account.
SEPs are tax-favoured retirement plans that an employer or a sole proprietor can set up. The employer can deduct the contributions for employees, but only up to a maximum of 25 percent of the total compensation of the company’s non-highly compensated employees. The SEP must be set up before 1997. The contributions can vary by state, but a SEP is generally tax-free if a partnership or sole proprietor employs the employee.
The employer must maintain thorough records after paying super to employees. The employer must document the total amount of super each employee receives and which fund they choose.
Cash flow
To create a cash flow budget, you need to identify where the money comes into the business. The cash flow statement allows a business owner to accurately gauge the amount of money coming in and out of their business. A cash flow statement can assist a business owner in planning for seasonal trends and payments. The cash flow statement needs to reflect both the actual figures and the estimated costs of each month. It is important to label each cost and state whether it is GST inclusive or excluded. Finally, it must reflect the opening and closing balance of the business.
Small businesses often experience irregular cash flows and are difficult to predict, and cash flows may change regularly and require regular monitoring. Investing in a high-quality superannuation plan is vital for small business cash flow. You can also seek the advice of a professional accountant or visit https://www.numericeight.com.au/superannuation to learn more about this.
Investment options
Investing in the stock market is an excellent option. You become a shareholder of a company when you buy shares, and then you can watch your investments increase in value over time. If you’re lucky, you may receive a share of a company’s profits in dividends. However, investing in shares isn’t without risk and requires you to decide when to buy and sell them.
If you’re running a small business, a good choice is a business that requires some capital. Before attracting an investor, you need to have a good business plan and know how you’ll pay back the money. Investors will be interested in learning more about you and your business than just the number of employees. However, if you don’t have the resources to hire an employee, a small business that needs some capital should consider investing in a superannuation fund that offers these options.
