Superannuation is the money which employers pay for their workers/employees retirement benefits in addition to the wages. Generally if any employee is paid $450 or more (before tax) in a calendar month, the employer is liable to pay superannuation.
The minimum amount of employer contribution is called Superannuation guarantee (SG) and can be calculated using the superannuation guarantee contributions calculator:
- The SG is currently 9.5% of an employee’s normal time earnings.
- Employer should pay SG at least 4 times per year, by the quarterly due dates.
- Employers must pay into complying Superannuation fund.
- If employers fail to provide SG on time they may be charge to pay Superannuation guarantee charge.
- If taxpayers engage someone to do work of a domestic or private nature for 30 hours or more per week and pay them $450 or more (before tax) in a calendar month, you have to pay SG for them. ‘Domestic or private’ means work relating personally to taxpayers (not to a business of yours), or work relating to their home, household affairs or family – such as a nanny or housekeeper.
- If taxpayers use funds from the National Disability Insurance Scheme (NDIS) to engage a domestic help, they may have to pay SG for these workers.
If employer don’t pay the minimum amount of SG for their employees into a correct fund by the end of due dates, they are required to pay the Superannuation guarantee charge (SGC)
The charge includes the following amounts:
- SG shortfall amounts calculated on their employee’s salary or wages.
- Interest on those amounts outstanding. Current rate of interest is 10%.
- An administration fee. Current administration fee is $20, per quarter
Employers must file their SGC statements and pay the charge by the due date
|1||1July – 30 September||28 November|
|2||1 October-31 December||28 February|
|3||1 January- 31 March||28May|
|4||1 April – 30 June||28 August|
Taxpayers have to pay Superannuation for some contractors, even if they have an Australian business number (ABN). Taxpayers pay Superannuation no matter whether the employee:
- Is full-time, part-time or casual.
- Receive a Superannuation pension or annuity while still working – including those who qualify for the transition-to-retirement measure.
- Is a temporary resident – when they leave Australia, they can claim the payments you made through a ‘departing Australia Superannuation payment’
- Is a company director
- Is a family member working in your business – provided they are eligible for Superannuation guarantee?
Employees not eligible for Superannuation
Taxpayers don’t have to pay SG for:
- Non-resident employees taxpayers pay for work they do outside Australia
- Some foreign executives who hold certain visas or entry permits (call 13 10 20 for information)
- Employees provided benefits under the Community Development Employment Program
- Members of the army, naval or air force reserve for work carried out in that role
- Employees temporarily working in Australia who are covered by a bilateral Superannuation agreement. Taxpayers must keep a copy of the employee’s certificate of coverage to check the exemption.
If taxpayers are a non-resident employer, they don’t have to provide SG for resident employees for work they do outside Australia.
Super for minors
If a staff member is less than 18, they must work at least 30 hours and earn at least $450 a month to be eligible for SG.