As an employer you have an obligation to pay superannuation contributions on behalf of all your eligible employees.

Generally, you have to pay Superannuation Guarantee (SG) contributions for your employees if they:

• are aged between 18 and 70 (excluding salary or wages for part-time employees under 18, working no more than 30 hours per week)
• are paid $450 (before tax) or more in a calendar month
• work full-time, part-time or on a casual basis (including contractors for labour).

You may also have to pay superannuation for any employees who are visiting Australia on an eligible temporary resident visa.

Employers are not required to pay SG contributions when an employee is absent from work and not receiving pay. For example, while on parental leave or approved leave without pay.

Superannuation Guarantee (SG) obligations

As an employer you have an obligation to pay superannuation contributions on behalf of all your eligible employees. These contributions are in addition to your employees’ salaries and wages. This compulsory contribution is called the SG and it requires you to:

• pay superannuation for your eligible employees
• contribute to the correct superannuation funds
• pay contributions by the cut off date each quarter.

The Superannuation Guarantee (Administration) Act 1992 (the Act) requires employers to make SG contributions on (at least) a quarterly basis or you may incur an SG charge.

The SG Act requires contributions to be made by the 28th business day following the end of each calendar quarter (that is, by 28 July, 28 October, 28 January and 28 April).

When a cut-off date for payment falls on a Saturday, Sunday or public holiday, you can make the payment on the next working day.

If you don’t meet these deadlines you may have to pay the required amount, plus interest and an administrative penalty imposed by the Australian Tax Office (ATO) the following month. Other penalties may also apply. We encourage our employers to make payments monthly so they never have to worry about missing the SG deadline.

SG contributions are payable from the time an employee becomes eligible for superannuation under the provisions of an Award, Enterprise Agreement or the SG Act. This is generally when an employee commences work.

Employer contributions

Contributions should generally be made for Health Super members who are:

• at work
• on annual leave
• on long-service leave
• on paid sick leave
• while on workers compensation in some circumstances.

Employers are not required to pay SG contributions in certain circumstances when an employee is absent from work. For example, while on parental leave or approved leave without pay.

How much to pay?

The amount you have to pay is a percentage of each employee's quarterly 'ordinary time earnings'. The charge percentage is set out in the SG Act and is currently set at a minimum of 9%. To calculate the amount you will need to contribute for each employee, multiply the employee's 'ordinary time earnings' for the relevant quarter by 9%.

What are ordinary time earnings?

Ordinary time earnings are generally what your employees earn for their ordinary hours of work and include:

• over award payments
• commissions
• allowances (except reimbursements or expense allowance)
• bonuses (except those unrelated to specific performance criteria)
• shift loading and casual loading
• paid leave.

'Ordinary time earnings' does not include overtime (subject to some exceptions) and lump sum payments on termination of employment in lieu of unused sick, annual or long service leave. For access to handy calculators and tools which help you understand and meet your obligations as an employer, please visit the ATO website.

The SG Act (including the definition of ordinary time earnings) is complex. For advice about your obligations that relates to your circumstances, you should consult a legal adviser.