You must make super contributions for an employee if you're considered an employer for super guarantee purposes and your employee is entitled to the super guarantee.
Working out if you have to pay super
You also have to pay super for contractors if the contract is wholly or principally for their labour, and for employees who are temporary residents of Australia. If you’re a sole trader or partner in a partnership you don’t have to pay super for yourself, but you can make super contributions as a way of saving for your retirement.
To work out whether a sub contractor is eligible for superannuation, use the ATO sub contractor decision tool.
The Superannuation Guarantee Act stipulates that employers have an obligation to provide a minimum level of superannuation for employees who:
- Earn at least $450 (before tax) in a calendar month
- Are aged over 18 or, if under the age of 18, are working at least 30 hours per week.
Remember, if you’re a working director, you need to pay super for yourself as you’re deemed to be an employee of your company.
How much to pay and when to pay
Currently, you must pay a minimum of 9.5% of each eligible employee's ordinary time earning each month in super. Read the latest checklist of what is included in ordinary time earnings.
The Government has announced the rate will remain at 9.5% until 30 June 2021 and then increase by 0.5 percent each year until it reaches 12%.
BUSSQ is a monthly fund. Contributions are due and payable by the 14th day of the following month. If you wish to arrange a quarterly payment, then please let us know. We are flexible with this.
Under the Super Guarantee (SG) legislation, employer superannuation contributions must be paid – at a minimum – on a quarterly basis. Payments are due to be paid to a complying super fund by the 28th day of the month following the end of each quarter.
The Superannuation Guarantee (SG) cut-off dates are:
||Quarterly payment cut-off 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
Please note, if you are paying superannuation for your employees under an industrial agreement (eg. Enterprise Bargaining Agreement/EBA), you may be required to remit your contributions on a monthly basis.
Paying super as per the terms of an industrial agreement differs slightly to federal government legislative requirements. The SG legislation is a minimum requirement and industrial agreements override this, so you must adhere to the terms set out in them.
BUSSQ recommends that you check the superannuation payment terms of your current industrial agreement to ensure that you remain compliant, as terms can vary between agreements.
Records you need to keep
You must keep records for 5 years that show:
the amount of super you paid for each employee and how it was calculated
that you have offered your eligible employees a choice of super fund Standard choice form, and
how you calculated any reportable employer super contributions.
The rate of superannuation payable by employers under the current Superannuation Guarantee legislation is 9.5% of each eligible monthly employee's ordinary monthly time earnings.
For building sites that are covered by an Enterprise Bargaining or an Industrial Agreement the minimum rate may be specified in the agreement.
NOTE: Many Queensland Awards include the requirement to pay superannuation contributions while an employee is being paid Workcover benefits.
Employer Additional/Salary Sacrifice Contributions
BUSSQ can accept additional employer contributions, including salary sacrifice contributions. Salary sacrifice is an arrangement between you and your employee where they agree to forego part of their before tax pay, in return for you making super contributions of the same value to their BUSSQ account. The pay they salary sacrifice is paid directly into your employee's super fund before income tax is taken out (i.e. gross wages).
Member Voluntary (after tax contributions)
Members can contribute to their super by making voluntary contributions (after tax) to BUSSQ. There is no fee to do this and contributions can be made as a one-off or on an ongoing basis.
These contributions can be made by:
- Payroll deduction,
- Direct Debit, or
- Direct payment by the member.
By law, employers must forward all member contributions (after tax) that are deducted from wages or salaries to BUSSQ within 28 days of the end of the month in which the contribution has been deducted. Employers who fail to remit these contributions by the due date could face a penalty under the applicable legislation.
Need more details on employer obligations for superannuation – including information on the Superannuation Guarantee, tax and your superannuation responsibilities? Contact an Employer Representative today on 07 3369 1111.