For 2019–20, we estimate a net super guarantee gap of 4.9% or $3.4 billion. Overall, the gross gap of 5.9% indicates that employers are reporting more than 94% of their required super guarantee contributions without intervention from us.
We refer to the super guarantee gap as the net gap as it recognises the effects of our compliance activities. The gap without our compliance activities is referred to as the gross gap.
For theoretical contributions in the latest estimates, we apply a higher hidden wages uplift of 2.3% average across all industries to the Australian Bureau of Statistics (ABS) measure of wages and salaries. This replaces our previous estimate of 1.2% and now aligns with findings from our comprehensive internal study. The revised averaged 2.3% uplift is regarded as a better long-term estimate of the extent of hidden wages.
We applied the increased uplift factor retrospectively across all previous estimate years, which in turn has increased the net gap estimates for those years. For comparison, in Table 2 below, we show the gross and net gap estimates in percentage terms had we continued to use the 1.2% uplift. Independent external expert advice has endorsed this improvement.
The benefit of estimating this gap is in monitoring trends and developing insights over time. Relative to theoretical contributions, there has been a downward trend in the net gap from 6.0% in 2014–15 to 4.9% in 2019–20.
This largely reflects the relatively faster growth in the contributions base over that period. In particular, we observe a notably stronger growth rate in voluntary contributions for 2019–20 (up 5.7%).
This potentially reflects the link between payment of super contributions and pay as you go (PAYG) withholding by employers. PAYG withholding is linked to the ability to claim stimulus payments such as Cash Flow Boost. This has a partial effect of reducing both the net and gross gaps.
Table 1 below shows data for 2014–15 to 2019–20, including:
- theoretical super guarantee contributions
- compliance amounts
- amounts reported
- gross and net gap estimates.
In 2019–20, approximately 910,000 employers made contributions on behalf of around 12.1 million employees.
Element |
2014–15 |
2015–16 |
2016–17 |
2017–18 |
2018–19 |
2019–20 |
|---|---|---|---|---|---|---|
Gross gap ($m) |
3,901 |
3,885 |
3,519 |
3,968 |
4,198 |
4,045 |
Amendments ($m) |
516 |
577 |
744 |
858 |
851 |
672 |
Net gap ($m) |
3,385 |
3,308 |
2,775 |
3,110 |
3,348 |
3,374 |
Super guarantee paid ($m) |
52,882 |
54,926 |
56,521 |
59,274 |
62,270 |
65,583 |
Theoretical super guarantee liability ($m) |
56,267 |
58,234 |
59,296 |
62,384 |
65,618 |
68,957 |
Gross gap (%) |
6.9 |
6.7 |
5.9 |
6.4 |
6.4 |
5.9 |
Net gap (%) |
6.0 |
5.7 |
4.7 |
5.0 |
5.1 |
4.9 |
Table 2 shows data for 2014–15 to 2019–20 including both the gross and net gap in percentage terms over the period had we continued with the 1.2% uplift.
|
2014–15 |
2015–16 |
2016–17 |
2017–18 |
2018–19 |
2019–20 |
|---|---|---|---|---|---|---|
Gross gap 1.2% uplift (%) |
5.8 |
5.5 |
4.7 |
5.2 |
5.2 |
4.7 |
Net gap 1.2% uplift (%) |
4.8 |
4.5 |
3.5 |
3.8 |
3.9 |
3.7 |
Figure 1 displays the gross and net gap as a percentage over the same period with the 2.3% uplift.
Figure 1: Super guarantee gross and net (percentage), 2014–15 to 2019–20