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Superannuation Obligations
Superannuation Obligations
By: Law 4U
What does the employer contribute?
Employers must contribute to an employee's superannuation fund. This is called the Superannuation Guarantee, which came into operation on July 1, 1992.
The Superannuation Guarantee (Administration) Act tells employers that they must pay the following percentages of an employee's wages (excluding overtime, leave loading and fringe benefits):
Year | % of ordinary time earnings |
1997-98 | 6% |
1998-99 | 7% |
1999-00 | 7% |
2000-01 | 8% |
2001-02 | 8% |
2002- | 9% |
Are any employees left out?
Yes. The Superannuation Guarantee (Administration) Act says that employers do not have to pay the Superannuation Guarantee in certain circumstances, for example:
- employees earning less than $450 per calendar month (before tax);
- employees under the age of 18 who work less than 30 hours per week;
- employees over the age of 70;
- certain employees who are not resident in Australia and are paid for work outside of Australia;
- employees paid to do work of a domestic or private nature for not more than 30 hours a week, e.g. a part-time nanny or housekeeper.
What if compulsory contributions are not made?
All employers must tell the Tax Office every year about the contributions that have been made for employees. The Tax Office can audit the employer's accounts, and charge interest on any outstanding payments, plus administrative fees.
All employers must tell the Tax Office every year about the contributions that have been made for employees. The Tax Office can audit the employer's accounts, and charge interest on any outstanding payments, plus administrative fees.
Can the employer pay more?
An employer can make payments above the compulsory superannuation guarantee as:
- a reward for a worker's performance;
- a type of co-payment, where the employer's contribution increases in line with the employees voluntary contribution; or
- a "salary-sacrifice" - this is where the employer makes a contribution that would otherwise be paid as salary.
If you want your employer to pay more, you should get advice from an accountant, but keep in mind that employers are limited in the amount that can be claimed as a deduction for superannuation contributions made for a particular employee.
Read this: This fact sheet is intended to be general information about the law inAustralia
Read this: This fact sheet is intended to be general information about the law in
© Lawscape Communications P/L
Last Updated – February 2008
