You’re required to pay super contributions on behalf of eligible employees to help them save for their retirement. This compulsory super contribution is called the Superannuation Guarantee, or SG, and it’s currently set at 9.5% of your employees’ ordinary time earnings. The Superannuation Guarantee is set to increase to 12% progressively over the following eight years.
To work out how much you need to contribute for each employee, multiply your employee’s ordinary time earnings for the payment period by 9.5%.
Keep in mind that it’s a legal requirement to pay your SG contributions by the due date each quarter to avoid penalties.
Who’s eligible to receive SG contributions?
Generally, you have to pay SG contributions for any employee who is:
- Over age 18 and you pay them $450 (before tax) or more in a calendar month
- Under age 18 and works at least 30 hours per week and you pay them $450 or more (before tax) in a calendar month.
It doesn’t matter whether your employee is full time, part time or casual.
Can you claim a tax deduction for SG contributions?
You can claim a full tax deduction for all contributions you make to Statewide on behalf of your employees. This includes SG contributions and contributions made under a salary sacrifice arrangement.
If you need help working out whether or not you need to pay super on behalf of an employee, contact the Australian Tax Office on 13 10 20 or visit www.ato.gov.au.
If you’d like to find out more about when and how to pay SG contributions, call our friendly Client Services team on 1300 65 18 65.