Super obligations for employers
Employers have an obligation to pay superannuation guarantee (SG) for their employees.
Your eligible employees
Generally, if you pay an employee $450 or more (before tax) in a calendar month, you must pay them super guarantee (SG) contributions on top of their wages.
From 1 July 2022, the $450 threshold mentioned above will not apply. SG contributions must be paid for eligible employees no matter how much they earn.
If your employee is under 18 or is a private or domestic worker, such as a nanny, they must also work more than 30 hours per week to qualify. For example, you will have to pay them super on top of their wages for each week that the employee has worked more than 30 hours.
Amount of super payable
The minimum super you must pay each quarter for each eligible employee is a percentage of their ordinary time earnings (OTE). The percentage is known as the SG rate. The SG Rate is scheduled to change each year as shown in Table 1 below.
Table 1 – SG Rates
The maximum SG contribution is limited to a maximum contribution base. This base amount is shown below for the current financial year and is indexed annually and is usually available before the start of the financial year.
Table 2 – Maximum Contribution Base
Table 3 – Maximum Contribution Base example
Betty is the Head of Marketing at Example Electrical Pty Ltd.
During the July–September quarter of the 2021–22 financial year, Betty’s OTE is $60,000.
The quarterly maximum contribution base for 2021–22 is $58,920.
Example Electrical Pty Ltd uses the maximum contribution base to work out the SG contribution for Betty for the quarter:
$58,920 × 10% = $5,892.00
Betty’s OTE above $58,920 is ignored.
When to pay super
The SG contributions must be paid to the super fund within 28 days after the end of each quarter, see table below. You can generally claim a tax deduction for super contributions that you pay on time. If your SG contributions are late, you must lodge a Superannuation guarantee charge statement and pay the superannuation guarantee charge (SGC) to the Australian Tax Office (ATO).
Table 4 – SG Due Dates
If you deduct super contributions from an employee’s salary or wages, such as salary sacrifice or personal after-tax contributions, the amount deducted must be paid to the super fund or paid to an approved clearing house before the end of the 28‑day period beginning immediately after the end of the month in which the deduction was made.
Table 5 – Salary sacrifice remittance example
An employer deducts $1,000 from Betty’s pay on 10 June as a salary sacrifice contribution.
The employer must either pay the $1,000 directly to Betty’s super fund or via an approved clearing house before 28 July.
Tax file number and Pay slips
Employers must provide the employee’s Tax File Number (TFN) to the employee’s super fund within 14 days of receiving the Tax File Number declaration or when you make the first payment to the fund receiving the TFN.
Details of any super contributions must be included in your employee’s pay slip, including:
- the amount of contributions made during the pay period (or the amount of contributions that need to be made)
- the name, or the name and number, of the superannuation fund the contributions were made to.
Employers must keep records for five years showing:
- the amount of super you’ve paid for each employee
- any documents you use to help calculate entitlements that you offered your eligible employees a choice of super fund.
- This applies even if you use a clearing house facility to pay contributions.
If you have new employees start and they don’t choose a super fund, you may have an extra step to take to comply with choice of fund rules. You may need to request their ‘stapled super fund’ details from the Australian Taxation Office (ATO).
When a new employee starts, you can follow the following simple steps:
- If your new employee has chosen a super fund, pay the SG contributions to the chosen super fund.
- Keep a record of your employee’s request to pay to their chosen super fund.
- No further action required.
- If your new employee has NOT chosen a super fund, request the stapled fund details from the ATO.
- Pay the SG contributions to the stapled fund.
- If your new employee does not have a stapled fund, or has not chosen a super fund, you may pay the SG contributions to the default.
- Employers must follow these steps in this order, otherwise the employer may be required to pay the choice shortfall penalty.
Combine Your Super
Locate and combine all your super into your one account.
Forms & Guides
Download forms and guides to help you manage your super.
Get in contact with our in-house Financial Planner
Contact Us Today
Our Member Services team will answer your questions about super