As an employer you have 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 under Government legislation is called the Superannuation Guarantee (SG). 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.
(You may also be subject to other compulsory contribution requirements eg. under an award)
The Superannuation Guarantee (Administration) Act 1992 (SG 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).
| Period | Due Date |
| 1 July - 30 September | 28 October |
|---|---|
| 1 October - 31 December | 28 January |
| 1 January - 31 March | 28 April |
| 1 April - 30 June | 28 July |
When a cut-off date for payment falls on a Saturday, Sunday or public holiday, you can make the payment 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. Our employers are encouraged 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 SG Act. This is generally when an employee commences work.
Contributions should generally be made for Health Super members who are being paid salary while:
- at work
- on annual leave
- on long-service leave
- on paid sick leave
- on workers compensation in some circumstances.
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.
How much to pay?
The amount you have to pay is a percentage of each employee's quarterly 'ordinary time earnings' (up to a maximum amount, which varies each year). 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, and
- paid annual 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 told 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 an appropriately qualified adviser.