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  • Measuring the gap

    We use a range of data to estimate the super guarantee gap.

    The super guarantee methodology and resulting estimate have been endorsed by an independent expert panel as being credible, reliable and appropriate given the data available. The panel has assessed the reliability of the estimate as ‘medium’ (see Methodology for more detail).

    The methodology will mature over time with repeated use and testing of the underlying assumptions and methodology framework.

    We build the estimate of the gap using data from the Australian Bureau of Statistics (ABS) to determine salary and wages. Specifically, we look at Compensation of Employees data from the Australian System of National Accounts. This allows us to estimate the super guarantee contributions employers are required to make under the law.

    We then make adjustments for:

    • amounts that are not subject to super guarantee (for example, where monthly earnings are less than $450)
    • amounts not considered ‘ordinary time earnings’ (such as overtime)
    • the black economy, which includes hidden cash payments to employees and people engaging in sham contracting.

    We then apply the statutory super guarantee contribution rate applicable to the relevant year (for 2016–17 it was 9.5%).

    This gives us an estimate of the amount of super guarantee employers are required to make for the purposes of the calculation (or the ‘adjusted theoretical super guarantee amount’), which was $58.8 billion in 2016–17.

    This amount is then compared to the super guarantee contribution employers made to their employees’ super funds for the purposes of the calculation (estimated to be $55.9 billion in 2016–17). To work out this amount, we examine the Member Contributions Statement data reported to us by super funds and also payment summary data from employers. The super guarantee gap is established on an accrual basis and, as such, late payments do not contribute to the gap.

    The difference between the adjusted theoretical super guarantee amount and the super guarantee contribution voluntarily paid represents the gross super guarantee gap (which was $2.9 billion in 2016–17).

    We then factor in the direct impact of ATO compliance activities such as reviews and audits (which was $577 million) to reach the net super guarantee gap of $2.3 billion in 2016–17.

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      Last modified: 13 Feb 2020QC 57181