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Superannuation Guarantee (SG) requirements

If you are running a business or employing people you are likely to have superannuation obligations. This is because all employes under Australian law are required to make SG contribtuions to a complying superannuation fund for most employees.

The SG contribution rate is 9% of an employee's earnings base, but you can contribute more SG if you like. While there are no limits, only a prescribed amount will be taxed at super's concessional tax rates.

Which employees receive the SG?

Generally, you are required to make an SG payment for employees who earn $450 or more in a calendar month.

You do not have to make SG contributions for employees who:
  • earn less than $450 per calendar month
  • are aged 70 or over (you can't contribute for an employee
    aged 75 or over), or
  • are aged under 18 and working 30 hours per week or less.

 

How much SG is payable?

Unless an Award or industrial agreement says elsewise, the formula is:

Ordinary Time Earnings (OTE) per calendar month  x  9% = SG payable

From 1 July 2008 all employers will be required to use this formula.

 

When are SG payments due?

  • By 28 October (for the quarter ending 30 September)
  • By 28 January (for the quarter ending 31 December)
  • By 28 April (for the quarter ending 31 March)
  • By 28 July (for the quarter ending 30 June)

 

Employers who do not meet their SG obligations will have to pay a charge equal to the contribution shortfall (which is not tax deductible) plus interest and an administration charge. An employer paying super under an industrial award, or other workplace agreement, will have these amounts counted towards their SG contribution amounts. The Australian Tax Office (ATO) is responsible for the SG. Compliance for SG is by self-assessment, and may be subject to audit by the ATO. 

 

For specific information regarding your SG obligations visit the ATO website.