Under the superannuation guarantee law you must pay super contributions for your eligible employees, at a minimum rate of 9% of their ordinary time earnings, so they can enjoy the benefits of super in their retirement.
Working out if you have to pay super
Generally, you have to pay super for an employee if they're between 18 and 69 years old (inclusive) and you pay them $450 or more (before tax) in salary or wages in a month. It doesn't matter whether the employee is full time, part time or casual. Employees who are under 18 years old must meet these conditions and work at least 30 hours per week to be entitled to the super guarantee.
You also have to pay super for contractors if the contract is wholly or principally for their labour, and for employees who are temporary residents of Australia.
If you're a sole trader or partner in a partnership you don't have to pay super for yourself, but you can make super contributions as a way of saving for your retirement.
Setting up super for a worker
You must pay contributions into a complying super fund or retirement savings account (RSA) and pass on your employee's tax file number (TFN) to their super fund where you are required to do so. Your eligible employees may be entitled to choose their super fund - if so, you must provide them with a form enabling them to make their choice.
How much to pay and when to pay
The minimum super you must pay is 9% of each eligible employee's 'ordinary time earnings' - basically, 9% of the amount they earn for their ordinary hours of work. You can generally claim a tax deduction for super contributions.
You have to make payments at least four times a year. The cut-off dates are 28 days after the end of each quarter.
What you must do if you haven't met your obligations
If you don't pay the minimum amount into the correct fund by the due date, you'll have to lodge a Superannuation guarantee charge statement - quarterly (NAT9599) and pay us the superannuation guarantee charge. This charge is the amount of shortfall super that needs to be paid for the employee, plus interest, plus an administration fee.
Records you need to keep
You must keep records that show:
- the amount of super you paid for each employee and how it was calculated
- that you have offered your eligible employees a choice of super fund
- how you calculated any reportable employer super contributions.
Last Modified: Thursday, 21 February 2013