Super is a way of saving money for your retirement. Employers must pay super into a complying super fund or retirement saving account (RSA) for their eligible employees.
These payments are called super guarantee payments or employer contributions.
Generally, as an employee, your employer should be paying super for you if you are:
- aged 18 years or over but under 70 and
- paid at least $450 (before tax) in a calendar month
If you are under 18, you are eligible for compulsory super guarantee if you work 30 hours or more a week.
You may also be eligible if you work under a contract that is wholly or principally for your labour
You may not be eligible if you’re:
- paid to do work of a private or domestic nature for 30 hours or less each week
- a non-resident employee and you’re paid to do work outside Australia
- a member of the Army, Navy or Air Force Reserve
- a foreign executive holding a specific class of visa or entry permit, or
- temporarily working in Australia for an overseas employer and are covered by a bilateral social security agreement.
If you are entitled to super guarantee payments, your employer must pay a minimum of 9% of your earnings base into your super account.
Your earnings base may be stated in an award, an agreement or contract with your employer, an occupational super arrangement or a law of the Commonwealth, a State or a Territory.
If none of these applies to you, your earnings base will be based on ‘ordinary time earnings’. This is what you earn for your ordinary hours of work, which generally includes your ordinary pay, over-award payment, shift loading and commission.
From 1 July 2008 all employers will be required to calculate the minimum contributions using what you earn for your ordinary hours of work.
Jane is an administration officer and is paid $700 per week before tax.
Jane’s earnings base for the quarter (13 weeks) is
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($700 x 13) = $9,100
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Her employer’s super contribution for the quarter is
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(9% x $9,100) = $819
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You should receive an annual Members Statement from your super fund. This statement will show you how much super your employer has contributed on your behalf. You can also contact your super fund for such information.
If you’re concerned about unpaid super guarantee contributions you should:
Step 1
Talk to your employer. You should ask them:
- how often they are currently paying your super
- into which fund they are paying it, and
- how much they are paying.
- a good idea to ask these sorts of questions when you start work with an employer (from 1 July 2005, most employers are required to ask which fund you want to use).
Step 2
Check your last Member Statement from your super fund, or contact them to confirm if your employer has paid your super.
Step 3
If you have completed steps 1 & 2 and still believe your employer is not paying enough or any super, and/or is not paying the super to your chosen fund, you can lodge an enquiry with the Tax Office about unpaid super.
An employer may have to make super contributions for contractors paid under a contract that is wholly or principally for labour. This is even if the contractor quotes an Australian business number.
If the contract is partly for labour and partly for something else (for example, the supply of goods, materials or hire of plant or machinery), it will still be a contract for labour if it is principally (chiefly or mainly) for labour.
'Labour' includes mental and artistic effort as well as physical work.
Last Modified: Tuesday, 11 September 2007
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