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  • Super guarantee payments

    If your employee is an eligible employee for super guarantee purposes, you're required to make super guarantee payments for them. Super guarantee is 9.5% of an employee's 'ordinary time earnings' base each quarter (up to the maximum contributions base for that quarter).

    From 1 January 2020, if you make super contributions for your employee under an effective salary sacrifice arrangement:

    The quarterly super guarantee payment due dates apply only to the minimum required SG contribution.

    Super guarantee based on ordinary time earnings base

    The minimum amount of super guarantee you're required to pay for your employee is based on their ordinary time earnings base. This is the sum of your employee's OTE and any amounts which would have been OTE, had they not been salary sacrificed into a complying super fund or Retirement Savings Account.

    From 1 January 2020, entering into a salary sacrifice arrangement will not reduce your employee's ordinary time earnings base, and therefore it will not reduce the amount of super guarantee that you're required to pay.

    Salary-sacrificed amounts do not count towards super guarantee

    From 1 January 2020, super contributions to an employee's fund under an effective salary sacrifice arrangement do not count towards your super guarantee obligation.

    Example: Salary sacrifice and super guarantee comparison

    Sally and Zoe start work with the same organisation for remuneration of $60,000 a year. Zoe decides to enter into an effective salary sacrifice arrangement with her employer and will sacrifice $10,000 of her annual earnings into her super fund. Sally receives her earnings of $60,000 as salary.

    Sally and Zoe are both eligible employees for super guarantee purposes. Their employer is required to contribute a minimum amount into their super funds – that is, 9.5% of their ordinary time earnings. Sally and Zoe's salaries comprise only ordinary time earnings amounts.

    From 1 January 2020, Zoe would be paid the same amount of super guarantee as Sally as the employer can no longer use the salary sacrifice agreement to satisfy or reduce their obligation.

    Calculation of total salary and super

    Calculation item

    Sally

    Zoe 

    Pre-sacrifice salary

    $60,000

    $60,000

    Super salary sacrifice

    $0

    $10,000

    Reduced salary

    $60,000

    $50,000

    Minimum 9.5% super guarantee

    $5,700

    $5,700

    Total employer super contributions

    $5,700

    $15,700

    Total salary and super

    $65,700

    $65,700

     

    End of example

    When to pay contributions

    You're required to make super guarantee contributions for each eligible employee by the quarterly payment due dates. This applies only to the minimum super guarantee amount you're required to pay under the law.

    Some industrial awards and super funds require employers to make super contributions for their employees more regularly than the quarterly payments required under the super guarantee law.

    See also:

      Last modified: 27 Feb 2020QC 17235