As an employer, you generally have to pay super contributions of at least 10.5% of ordinary time earnings (OTE) paid for all eligible employees; this is called the Superannuation Guarantee (SG). The SG also applies if you pay different super rates under an award or enterprise agreement.
What do I have to do for the SG?
Each pay period, you will need to:
- identify all employees entitled to super contributions that period
- check for any ATO shortfall exemption certificates related to that quarter
- calculate the amount of SG super for each eligible employee
- deduct any salary sacrifice or personal contributions the employee has arranged
- pay the contributions to the appropriate super fund – note this can be done less often as long as it meets the quarterly SG deadlines
You also need to include this information on payslips.
You must tell new employees which fund you have as your default fund within 28 days of them starting work. Each employee’s super contributions must be paid into the fund they have nominated or your default fund if they haven’t nominated one.
You must provide the tax file number (TFN) of new employees to their super fund with their first contribution or within 14 days of them starting (whichever comes first).
How do I calculate SG payments?
Since July 2008 super is based on the ordinary time earnings (OTE) for employees. OTE is what an employee generally earns in their usual hours, but please refer to the ATO for a full explanation of this term.
Most electronic accounting and payroll software packages will determine the amount of super to be paid for each employee automatically.
If an award, agreement or other industrial agreement requires different levels of super, then you must use those figures to calculate the super contributions for each employee. However, no agreement can result in an employee receiving less than they would get under the SG.
Note that the maximum contributions base for an employee with a shortfall exemption certificate is $0 so you do not have to pay any SG contributions for them for the nominated quarter(s).
When are payments due?
SG contributions must be made at least once a quarter by the following dates:
- October 28 for Quarter 1 (July 1 to September 30)
- January 28 for Quarter 2 (October 1 to December 31)
- April 28 for Quarter 3 (January 1 to March 31)
- July 28 for Quarter 4 (April 1 to June 30).
You can choose to make contributions more often to smooth out your cash flow. It also means your employees’ super receives investment earnings sooner.
If you know you will miss a deadline, contact the ATO as soon as possible as being late generally means you will have to pay the SG Charge. If you realise you have missed a deadline, make the contribution as soon as possible – you may also have to complete a Super Guarantee Charge Statement – Quarterly (NAT 9599) (available from the ATO).
What is the SG charge or levy?
The SG Charge or SG Levy is a penalty paid to the ATO by employers who have missed any super contributions for their eligible employees.
You can’t claim a tax deduction for the SG Charge or late contributions.
Can I appeal those charges?
If you believe a ruling about your SG obligation is incorrect, you can request a review or lodge an objection. Visit the ATO website (www.ato.gov.au) or contact them on 13 10 20 for further information.
Email: email@example.com | Local call: 1300 128 751 | Phone: 02 6109 6888 | www.avsuper.com.au
This information is of a general nature only and does not take into account your personal objectives, situation or needs. Before making a decision about AvSuper, you should consider your own requirements and the relevant Product Disclosure Statement (PDS) and Target Market Determination (TMD). For a copy call us or visit the AvSuper website, www.avsuper.com.au. AvSuper Pty Ltd (ABN 46 050 431 797, AFSL 239078) is the Trustee of the AvSuper Fund (ABN 84 421 446 069). FS3000.5 02.2021