How to pay super: Things business owners should know

Paying your staff’s super is an essential part of being an employer, and though changing rules and legislation can make it confusing and time consuming, it’s important to get the who, what, how, and when right.

Which is why we’ve put together this simple guide to help step you through some important things you need to know to get it right and relatively hassle-free. 

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?

Generally, your employee needs to give you:

• their super fund's name, ABN (Australian Business Number), address, and phone number
• their own 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 11%. This means that, as an employer, you’ll need to pay a minimum 11% of each eligible worker’s ordinary time earnings, which can also include certain bonuses and commissions, but not overtime payments, expense allowances or reimbursements (for example to cover the costs of things like laundry or travel).

If your employees are covered by an award or employment agreement that specifies a super contribution higher than 11%, you must pay that higher amount. However much it is, you’ll need to pay it into each employee’s super account at least every quarter.

When a due date falls on a weekend or public holiday, your SG contribution must be received by your employee’s fund on or before the next business day.

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’ll need to pay:

1. 1. the SG shortfall, which includes:
   a. the super guarantee calculated on salary and wages (including any overtime) , and
   b. any choice liability, based on the shortfall and capped at $500;
2. interest of 10% per year (accrues from the start of the relevant quarter); and
3. an admin fee of $20 per employee, per quarter.

How do I pay?

There are several options for paying super contributions. Two simple ways are:

Super fund employer portal - If some, or all, of your employees are with the same super fund (e.g. your business’s default super fund), you might be able to pay directly via the super fund’s online employer portal. For Rest, this would be EmployerAccess. If you’re a Rest employer, look at the box below to see how you can streamline all your super payments.

Clearing House – A super clearing house lets you make a single online payment that covers all your employees across multiple super funds. You can make a single payment for all your eligible employees using one data file through a SuperStream-compliant online system.

If you’re a Rest employer, you’ll already have access to SCH Online* – it’s a third-party clearing house which is available for Rest employers and helps distribute your payments to your employee’s super funds. Or, if you’re eligible, you can use the ATO’s Small Business Superannuation Clearing House, other clearing houses, or certain payroll providers.