We’re here to make the difficult easy and explain your responsibilities when it comes to paying super.

What you need to know

How much super do I need to pay?

When paying super to your employees, as a general rule you use OTE (Ordinary Time Earnings) to calculate the minimum superannuation contributions required. The current rate of superannuation is 10% of OTE. To see what is included in OTE click here.

Which employees do I have to pay super for?

Generally, if you pay an employee $450 or more (before tax) in a calendar month, you must pay Superannuation Guarantee (SG) contributions on top of the employees wages.

If your employee is under 18 or is a private or domestic worker, such as a nanny, they must work more than 30 hours per week to qualify.

You have to pay super for some contractors, even if they quote an Australian Business Number (ABN).

Remember you must pay super no matter whether the employee is:

  • Full time, part time or casual
  • Receives a super, income account or annuity payment while still working - including those who qualify for transition to retirement
  • Is a temporary resident - when they leave Australia, they can claim the payments you made through a ‘departing Australia superannuation payment’

For more information about sub-contractors click here.

When must I pay my super?

Super Guarantee (SG) payments must be made to complying funds by the quarterly due dates.

Employers who pay superannuation for employees under an industrial agreement (e.g. Enterprise Bargaining Agreement/EBA), may be required to remit contributions monthly. The SG legislation is a minimum requirement and industrial agreements override this, so you must adhere to the terms set out in any applicable industrial agreements.

What happens if you pay your super later than these dates?

If you don’t meet your obligations, you may be liable to pay the Super Guarantee Charge (SGC) as well as any shortfall in contributions to the ATO. For further details download our Super Made Simple for Employers fact sheet.

Choice of fund

BUSSQ is a complying super fund that can look after you and your employees. 

Most employees are entitled to choose the fund that their employer pays their super contributions into. When an employee starts work, if they are entitled to choose their own fund, you must provide them with a Choice of fund form within 28 days from their start date (and keep this on record for five years). 

If your employees don’t choose a fund or provide the necessary information, you must have an employer nominated default fund to pay their super into, so you meet your obligations and won’t be liable for penalties.

It’s important to note that employees working under an EBA may not have choice of fund apart from the funds nominated in the EBA agreement.

Further information on employer default fund arrangements can be found on the ATO website.

Paying super for sub-contractors

Under the Superannuation Guarantee (Administration) Act 1992 (Cth) a contractor is entitled to superannuation contributions if they work under a contract that is ‘wholly or principally for the labour of the person’.

How do you know if you should be paying super for your contract workers?

You should take the following factors into consideration:

  1. How does your sub-contractor trade?
  2. Who decides when and where they work?
  3. Who supplies the materials for the job? (This does not include hand tools.)
  4. Do they have the power to delegate work to another party?
  5. How are they paid? Hourly/weekly rate or at the completion of the job?

If you have the control to delegate workloads and supply the major materials for the job (which does not include tools), you are likely to be considered the ‘employer’ in this contract relationship and, under SG rules, will be obliged to pay superannuation contributions for them.

Super must be paid to a complying super fund – chosen by the worker. It must not be paid directly to the worker, or to their bank account.

 Did you know... 

  • Having an ABN (Australian Business Number) does not automatically exclude a sub-contractor from being an ‘employee’ and therefore does not automatically release you from your superannuation obligations to that sub-contactor.
  • A person working for an hourly rate (labour only hourly rate sub-contractor) is still an employee and not a sub-contractor for superannuation purposes.
  • Every contract is different, and BUSSQ cannot confirm whether or not you should pay super for your contract employees. 
  • To be certain of your obligations when employing subcontractors, you should use the decision tool by clicking here or visiting ato.gov.au. If you have any further questions regarding your obligations simply contact the ATO for more information and their advice.
Woman with yellow jumper smiling at work - BUSSQ Super

Become a BUSSQ default employer

BUSSQ makes superannuation easy for employers. Our team of Account Managers are on hand to help you with your superannuation obligations and can provide a comparison between BUSSQ and your existing super fund.