Superannuation Guarantee (SG) legislation requires that employers make super contributions for their eligible employees. It defines which employees are eligible and how contributions are calculated and made.
In general terms, you have to pay superannuation for any employee who
- is aged 18* or more
- is paid $450 or more (before tax) in a calendar month
- works full time, part time or as a casual
- does not have a shortfall exemption certificate from the ATO.
You may also need to pay super for contractors if at least half the dollar value of the contract is based on a person’s labour and skills rather than materials. Note that employees may request an exemption from your SG payments for specified quarters under certain circumstances.
* You must also pay super for an employee who is under age 18, earns $450 or more in a calendar month and works for more than 30 hours per week.
How much SG has to be paid?
The SG minimum is a percentage of an employee’s eligible salary but you can choose to pay above the minimum. The minimum was 9% from 2002-03 but has been gradually changing since 1 July 2013 as follows:
|Financial year||SG rate|
The SG covers most working Australians. However, some employees are covered by an industrial award or a workplace agreement that includes provisions that replace or provide additional superannuation obligations. If you have employees eligible for super who are covered by an award, there may be some specific rules you must follow as some awards may impose additional superannuation obligations over and above the SG.
However, you must use SG rules if the super entitlement under an award is less than the SG.
When are superannuation guarantee contributions to be paid?
The cut off dates for payment of SG Contributions are provided in the table below.
|Quarter||Period||Payment Due Date|
|1||1 July – 30 September||28 October|
|2||1 October – 31 December||28 January|
|3||1 January – 31 March||28 April|
|4||1 April – 30 June||28 July|
Employers who do not make employee contributions on time or in full may be subject to a penalty imposed by the Australian Taxation Office (ATO) known as the SG Charge. This does not apply if the ATO has issued a shortfall exemption certificate for that employee in that particular quarter.
The charge is the sum of:
- the SG shortfall amount
- interest on that amount (10% p.a.)
- an administration fee of $20.00 per employee per quarter.