how much to pay and when
As of July 2018, employers must pay a minimum of 9.5% of each eligible employee’s ‘ordinary time earnings’ each quarter in superannuation.
The employer’s contribution is based on the amount an employee earns for their ordinary hours of work, called ‘ordinary time earnings. It includes things like commissions, shift loadings and allowances, but doesn’t include overtime payments.
Super is calculated quarterly. For each employee:
- multiply their ordinary time earnings for the quarter by 9.5%
- pay this amount to a complying super fund or retirement savings account by the quarterly cut-off date.
quarterly super deadlines
|1||1 July - 30 September||28 October|
|2||1 October - 31 December||28 January|
|3||1 January - 31 March||28 April|
|4||1 April - 30 June||28 July|
When the payment date falls on a Saturday, Sunday or public holiday, payment is made on the next working day after the cut-off date.
If an employer makes back pay salary or wages to a former employee, super contributions must also be paid on that back pay.
timing of super contributions
Employees should be aware that super guarantee contributions count towards their concessional contributions cap in the year the fund actually receives the contribution.
For more information employees can download the Australian Tax Office factsheet ‘Super contributions – too much super can mean extra tax’.
Super payment tax deduction
- you can claim a tax deduction for super payments in the financial year you make them
- if you haven’t paid the minimum amount to the correct fund on time, you have to lodge a superannuation guarantee charge statement and pay the superannuation guarantee charge (SGC); the SGC is not tax deductible
- late super payments are also not tax deductible if you elect the late payment offset to reduce an SGC liability.
more articles about: guide to superannuation
- employer obligations
- superannuation reforms
- how superannuation works
- should they stay or should they go?
- superannuation contribution changes
- compliance options
- changes to SMSF Levy
- super contributions caps
- how to set up a super for an employee
- how much to pay and when
- help for small businesses
- modern awards
- insurance requirements
- salary sacrifice
- boosting employee super
- superannuation guarantee age limit
- records you need to keep
- the importance of communication