Paying your employees super

Who do I pay?

Put simply, if you pay a worker, you must also pay their Super Guarantee (or SG) - which is what the compulsory superannuation contributions you pay into their super fund is officially called.

Generally, every worker aged 18 years or over qualifies for super. If they’re under 18, they must work more than 30 hours a week to qualify. Temporary residents like backpackers and overseas students are also eligible for super contributions.

It doesn’t matter whether the employment arrangement is full-time, part-time, or casual – they’re entitled to employer super payments. Plus, if you pay contractors mainly for their labour - they may also be entitled to super, as they’re categorised as employees for SG purposes.  

What information should my employee give me so I can pay their SG to their choice of fund?

Generally, your employee needs to give you:

• Their super fund’s details, including the fund’s name, ABN (Australian Business Number), address, and phone number

• Their own personal super details, including their Tax File Number (TFN), super account name, and membership number

How do I calculate how much super to pay and when?

The current SG rate is 12%. This means that, as an employer, you’ll need to pay a minimum 12% of each eligible worker’s qualifying earnings, a new term that brings together ordinary time earnings (OTE) and other payments such as commissions and eligible salary sacrifice amounts. For many employers, the new concept of QE doesn’t change the amount of SG being paid, however the timing of payments is likely to change. Under Payday Super laws, employers need to pay SG contributions at the same time as salary and wages, rather than once every quarter.  

If your employees are covered by an award or employment agreement that specifies a super contribution higher than 12%, you must pay that higher amount. 

What happens if I don’t pay an employee’s super?

If you don’t pay your employee’s SG amount in full, on time and to the right super fund, your business will need to pay the SG charge.

This mistake can be costly, because you may need to pay:

• the SG shortfall, or the amount outstanding at the time of the ATO assessment, additional notional earnings, calculated using the general interest charge rate, calculated daily
• An administrative uplift amount of up to 60% of the shortfall amount, which may be reduced by voluntarily disclosing non-payment prior to the ATO assessment. A choice loading if choice of fund requirements have also not been met.

More information is available on the ATO website here.

How do I pay?

A super clearing house lets you make a single online payment that covers super contributions to all your employees across multiple super funds.