Superannuation Guarantee (SG)
As an employer, you should be aware that Superannuation Guarantee (SG) contributions for eligible employees must be paid at least four times a year (you can choose to make contributions more frequently if that suits your business). We have provided a summary below of your main obligations, however, detailed information regarding your employer super guarantee obligations can be found on the ATO’s website.
You are required to pay SG for your permanent and casual employees, where they are:
- At least 18 years old or under 18 and working at least 30 hours per week; and
- Earning at least $450 per month (before tax).
Small business owners are also required to follow these superannuation guidelines.Superannuation Guarantee Eligibility Decision Tool
For help deciding whether an employee is eligible for SG.
Currently, you must pay at least 9.50% of your employees’ ‘ordinary time earnings’ to super each quarter.
‘Ordinary time earnings’ is the amount your employee earns for their ordinary hours of work, including loadings, allowances, bonuses and commissions, but excluding overtime.
For more information and a list of payment types, see the ATO’s ordinary time earnings checklist.
You are not required to pay SG on an employee’s earnings above the ‘maximum contribution base’ limit.
The maximum contribution base for 2018/19 is $54,030 per quarter. The maximum quarterly SG you would therefore need to pay is $5,132.85 (9.50% x $54,030) for each employee.Superannuation Guarantee Contribution Calculator
For help working out how much super you must contribute for your eligible employees.
As part of the government’s ‘Stronger Super’ legislation, employer SG contributions will increase in gradual increments from 1 July 2021, reaching 12% on 1 July 2025.
The table below details the increases:
|Financial Year||SG rate
(percentage of Ordinary Times Earnings)
|2014/15 – 2020/21||9.5%|
The current SG rate for 2018/19 of 9.5% will remain at this level until 30 June 2021.
You must pay SG amounts at least each quarter, but if it suits your business you can choose to pay more frequently. You have 28 days after the end of each quarter for your contribution to be paid and received by the super fund.
The following table is a reminder of the key periods and cut-off dates:
|SG Quarter||Date payment due*|
|1 July – 30 September||28 October|
|1 October – 31 December||28 January|
|1 January – 31 March||28 April|
|1 April – 30 June||28 July|
* Where the cut-off date falls on a non-business day, the next business day is used instead.
You should also be aware that if you don’t pay your SG contributions by the deadline, you may have to pay an SG charge to the ATO, which is not tax deductible.
You may choose to offer salary sacrifice arrangements to your employees. Salary sacrifice is where an employee chooses to have you pay some of their salary to super instead of taking the money as after-tax pay.
Your employee’s salary sacrifice contributions can be used to reduce your SG liability (if you choose) as:
- The employee’s earnings for calculating SG are reduced by the salary sacrifice amount; and
- Any salary sacrifice amount can counts towards the amount of your SG obligation
If you do not meet your SG requirements, for example, your contribution was received after the cut-off date, you will be subject to penalties enforced by the ATO, including:
- You must lodge a Superannuation guarantee charge statement with the ATO
- You must pay a SG charge to the ATO, including 10% penalty interest and an administration fee, and
- You will not be able to claim a tax deduction for the contribution or the SG charge
Other penalties apply for not meeting your super obligations – you should refer to the ATO website for full details.
You can claim a full tax deduction for super payments you make for employees under 75 years old by the cut-off date. Super payments are tax deductible in the financial year you pay them.