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As an employer, you are required to make compulsory super contributions into a complying superannuation fund for all of your eligible employees. This is known as the Superannuation Guarantee (SG).
Under the ‘choice of fund’ rules, your employees may also have the right to choose which super fund receives their SG contributions. See our Choice of fund page for further information.
Superannuation Guarantee obligations
The minimum SG rate is currently nine percent of each eligible employee’s gross earnings. Awards and Industrial Agreements can stipulate a higher employer contribution rate.
You need to contribute towards an employee’s superannuation until the employee reaches the age of 70. Once an employee reaches 70 years, you are no longer required to contribute to super unless those contributions are mandated.
You are not required to make superannuation contributions for employees who are:
- Paid less than $450 in a calendar month
- Aged 70 years and over (unless contributions are mandated)
- Under 18 years of age and working 30 hours or less, per week
- Non-residents being paid for work done outside Australia
- Employees covered by Bilateral Superannuation Agreements with other countries
- Foreign executives who hold certain visas or entry permits under the Migration (1993) Regulations, and
- Paid to do work of a domestic or private nature for not more than 30 hours a week.
A common misconception is that contractors are not covered by the SG. If you have engaged a person under a contract that is mainly for their labour, you will be required to make SG contributions for at least the labour portion of their contract. Contact the Australian Tax Office (ATO) on 13 10 20 if you are unsure.
If you deduct personal contributions from an employee’s after-tax wages, legislation requires that these monies be paid into a complying fund no later than the 28th day of the following month. Fines may apply if you fail to do this.
Employee Tax File Numbers (TFN)
As an employer, it is compulsory for you to notify the fund of your employees TFN, within 14 days of the TFN being quoted to you by your employee.
If your employees are covered under a registered award or agreement that mandates reporting as one of the conditions, then you are required to report your contributions to them. For all other employees you are no longer required to report your contributions to them.