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Final pay and superannuation for employees

Find out information on your employees final pay and superannuation when you close a business.

11 July 2023

When you close or sell your business

Your business must continue to meet its obligations until it is either closed or sold to the new owners.

If you are an employer, it is important for you to consider finalising important tax issues for your workers, even though the business is no longer trading or has been sold. These issues include:

  • fringe benefits tax (FBT)
  • pay as you go (PAYG)
  • superannuation
  • eligible termination payments.

We have tax tables and information on the taxation of termination payments to help work out your obligations.

Your obligations may vary, depending on whether the worker is an employee or contractor. Director penalties can apply for unpaid superannuation, PAYG withholding and GST liabilities the business has incurred, even if they are not yet due when you close the business.

Paying superannuation

You are still required to pay the minimum amount of superannuation (SG) for your employees and some contractors to the correct fund by the due date in order to avoid being liable to pay a super guarantee charge (SGC). This will be based on ordinary time earnings for the quarter.

If you cannot pay the full SG contributions, pay as much as you can to their fund by the due date, to reduce the SGC. You will need to lodge the SGC statement within 28 days after the quarterly SG is due and pay the charge to us.

If you are having trouble paying the SGC, we can work with you to set up a payment arrangement.

For more information, see Super for employers.

Single Touch Payroll (STP) reporting

If an employee’s employment has ended, make sure you report their cessation (end) date in your STP report. How you report about your employee depends on whether you're using STP Phase 1 or STP Phase 2 reporting. If you are using STP Phase 2 you will also need to report the employee's reason for leaving.

If you have already paid them their final pay, you can still tell us this information by submitting an update event. You don’t need to wait until the end of financial year to finalise your STP data. Finalising is an important step as it enables individuals to lodge their income tax return at the end of the year.

If you don't report through STP you will need to lodge a PAYG payment summary annual report.

Your superannuation

If you are planning for retirement, are semi-retired or just looking at your options, the superannuation system may influence what you do with the proceeds from the sale of your business.

The withdrawing your super and paying tax measure allows individuals to access their super benefits, once they reach their preservation age, without having to retire or leave their jobs.

For more information, see Super for individuals.

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