Let’s talk about super guarantee

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Paying super guarantee (SG) is an important part of being an employer, as it provides for your employees’ future and their retirement.

Generally, regardless of whether they’re a casual worker or a family member, any employee working for you may be eligible to receive SG. Even some contractors are eligible for SG if they meet the additional eligibility requirements.

Prior to 1 July 2022, employees needed to earn $450 or more (before tax) in a calendar month to be eligible for super. This $450 threshold has now been removed.

You’ll need to pay super guarantee contributions to an employee’s super fund regardless of how much they are paid. Employees will still need to satisfy other eligibility requirements. See Removing the $450 per month threshold for super guarantee eligibility.

If you’re ever unsure whether you need to pay a worker super contributions, you can use the super guarantee eligibility decision tool on the Australian Taxation Office (ATO) website.

Once you’ve worked out if your employee is eligible to receive super, in most cases you’ll need to offer them a choice of super fund and make super payments to that chosen fund.

Employers may need to take an extra step before paying super for new employees. If a new employee doesn’t choose a super fund, most employers now need to request the employee’s stapled super fund details from the ATO.

A stapled super fund is an existing super account linked, or ‘stapled’, to an individual employee so it follows them as they change jobs. This aims to reduce account fees, avoiding new super accounts being opened every time an employee starts a new job. If you don’t meet your choice of super fund obligations, additional penalties may apply.

Now that you’ve worked out who’s eligible for super and which account to pay their super into, you need to pay the SG to your employees’ super funds at least 4 times a year. The minimum super you must pay is the SG percentage of the worker’s ordinary time earnings (OTE). This SG amount is in addition to salary and wages you pay your employees.

You must report and pay SG contributions electronically to meet SuperStream requirements. This means you can make all your super contributions in a single transaction, even if the payments are going to multiple super funds. Eligible small businesses can pay super for their employees through the ATO’s Small Business Superannuation Clearing House (SBSCH). If you use a commercial clearing house or the ATO’s SBSCH, you will meet SuperStream requirements.

What if things don’t go to plan?

We know you do your best to keep up with paying your employees super, but things don’t always go to plan. If you find yourself in a situation where you have missed, underpaid or didn’t pay to the right fund, you must lodge a Super guarantee charge statement and pay the SG charge (SGC) to the ATO by the due date. By doing this, you’ll avoid significant penalties.

The way you calculate the SGC is also different from how much SG you pay to your employees’ funds. The SGC is calculated on an employee’s total salary and wages (including overtime and some allowances) and includes interest and an administration fee of $20 per employee, per quarter.

However, if the issue is that you made late payments to your employee’s fund, you may be able to benefit from some relief. When completing your SGC statement, you can either:

  • claim a late payment offset which reduces the SGC you would otherwise have to pay
  • carry forward the late payment as an on-time contribution for a future quarter for the same employee.

If you’re worried that you’ll have difficulty paying the SGC, contact the ATO so they can work with you to find a solution tailored to your situation.

Claiming a deduction for super

You can only claim a deduction for on-time SG payments you make for employees, including additional contributions you have paid on behalf of your employee under a salary sacrifice arrangement. These deductions can only be claimed for payments the super fund received during the relevant financial year.

In other words, you can’t claim a deduction for SGC payments you make to the ATO because you have underpaid, not paid or paid your super obligations late.

Where to go for further help

For further help or if you need a refresher on how to meet your super obligations for employees: