SG payments and super rules

The Super Guarantee (SG)

As an employer, the minimum Super Guarantee (SG) that you're required to contribute is 9.5% of a person's before-tax salary or Ordinary Time Earnings (OTE).  

This compulsory contribution is paid directly to each employee’s nominated super fund, or default fund on their behalf.

You don't have to pay SG for an employee's earnings above a certain limit. This is called the maximum contribution base. It's $52,760 per quarter for the 2017/18 financial year.

When to pay SG

You must make payments at least quarterly. Payments made on time (before the Australian Taxation Office (ATO) SG contribution deadlines) can be claimed as a tax deduction.

If you don’t meet the deadline you'll need to lodge an SG statement and pay the SG charge levied by the ATO (includes the super, plus interest of 10% and an administrative fee of $20 per employee, per quarter).

Contributing to your employees' super

QuarterSG contributions due date
1 July – 30 September28 October
1 October – 31 December28 January
1 January – 31 March28 April
1 April – 30 June28 July

Do you need to pay super?

In general, you need to pay SG on top of wages if:

  • you pay an employee $450 or more (before-tax) in a calendar month, and
  • your employee is 18 years or over 
    or
  • your employee is less than 18 years and works more than 30 hours per week.

The SG must be paid whether the employee is here on a work visa or an Australian resident working full time, part time or casually.

You are required to pay super for some contractors, even if they quote an Australian Business Number (ABN). 

SG does not need to be paid to employees who are:

  • non-residents working outside Australia
  • covered by Bilateral Superannuation Agreements with other countries
  • foreign executives who hold visas or entry permits under the Migration (1993) Regulations, or
  • paid to do work of a domestic or private nature for less than 30 hours a week.

Please contact the ATO on 13 10 20 if you need more information.

How to make a contribution

SG payments can easily be made via QuickSuper, our free online clearing house. You can use direct debit, electronic funds transfer (EFT) or BPAY. Clearance times for these payments are detailed below:

  • Direct debit/BPAY: 3 business days
  • EFT: 1 business day

To make sure you meet the deadline, please also take note of public holidays, weekends and your financial institution’s daily cut-offs.

    Paying super on personal contributions 

    If an employee chooses to make a personal super contribution such as salary sacrificing, you'll need to deduct the contribution from their pre-tax earnings and pay it into their fund.

    The contribution must be paid no later than the 28th day of the following month (i.e. deductions made for the July period need to be paid by 28 August).

    What does Ordinary Time Earnings (OTE) mean?

    Ordinary Time Earnings (OTE) generally includes the ordinary hours of work plus:

    • shift and casual loadings
    • directors' fees
    • commissions
    • performance bonuses
    • paid annual, sick and long service leave
    • over-award payments, and
    • allowances.

    What's not included

    • parental leave, and
    • overtime which is generally not included, even if someone regularly works overtime as part of their job.

    For more information on salary or wages and OTE, go to the ATO's checklist.

    Providing Tax File Numbers (TFN)

    When an employee gives you their TFN, by law you must pass it on to their super fund. This needs to happen:

    • on the day that you make the first SG payment for that employee, or
    • within 14 days of receiving their TFN.

    If you don't pass the TFN to the employee's fund, not only will that member need to pay much higher tax on their contribution, you will also incur a financial penalty from the ATO. Penalties also apply if you engage a third party who fails to pass on a member's TFN.

    Reporting

    By law, reporting your contributions to employees is only required if they're covered by an award or agreement that mandates it.

    However, even if you're not obliged to, you might find that reporting can deliver other advantages like building employee relations or minimising employee contribution queries.

    Choice of fund

    When a new employee is eligible to choose their own super fund, you need to provide them with a Standard Choice Form within 28 days of their start work date.

    If your new employee doesn’t want to choose a fund, you must pay their contributions to your nominated 'default' fund. You must also tell employees (within 28 days of their start work date) which default fund that is.

    SuperStream

    SuperStream is part of the government's Stronger Super reforms which aim to make our super system more efficient, accurate and streamlined. SuperStream involves changes to the 'back office' administration of super including the introduction of mandatory online data standards and new employer obligations.

    Need more information on the rules of super?

    You can either contact us on 1300 130 780 or speak with the ATO on 13 28 61.

    Use our clearing house