We understand that as employers you play a vital role in Australia’s tax and superannuation system, and that paying super is a very important responsibility.
Super guarantee (SG) is paid on behalf of your eligible employees and some contractors to support their retirement savings. The minimum amount of SG you must pay is currently 10.5% of an employee’s ordinary time earnings, increasing to 11% from 1 July 2023.
No matter what stage of the hiring journey you’re in, we’re here to help you get your SG obligations right.
When you first hire an employee
There’s a lot to check off the list when hiring a new employee. When it comes to SG, the important thing that you need to do is offer your employee a choice of super fund using a standard super choice form, or an equivalent document with the same information.
If your employee has chosen a super fund, you can pay SG to their chosen fund. If your employee doesn’t provide you with their chosen fund, you need to request your employee’s stapled super fund (don’t worry, I explain what that is next) details from the ATO.
What is a stapled super fund?
A stapled super fund is just an existing super account which is linked, or ‘stapled’, to an individual employee so that it follows them as they change jobs.
It is really important to do these steps. If you don't meet your choice of super fund obligations, additional penalties may apply.
Paying personal super contributions
If you operate your business as a sole trader or partnership, you are not an employee of the business, and the SG rules don't apply to you. However, like any self-employed person, you can make personal contributions to a super fund for yourself as a way of saving for your retirement.
The good news is most self-employed people can claim a deduction for super contributions they make until 75 years old. When considering contributing to your super, keep in mind that contributions you make may be subject to extra tax if they exceed the contribution limit for that year.
If your business operates as a company or a trust, you are likely to be a director and an employee. In this case, the SG rules apply to you in the same way as they apply to other employees.
Dates are important
SG payments for your eligible employees and certain contractors must be made and received by complying super funds or retirement savings accounts on or before the SG quarterly due dates.
These dates are 28 days after the end of each SG quarter - 28 January, 28 April, 28 July and 28 October, so add them to your calendar. If you are using a clearing house to send payments on your behalf, make sure you allow extra time for their processing, to ensure that your SG contributions reach the super fund on or before the due date.
It is important to make these payments on time and in full, because if you don’t, then you must lodge a SG charge (SGC) statement and pay the SGC to the ATO. SGC is more than the super you would have otherwise paid to the employee's fund, because it includes interest and other fees. You also won’t be able claim a tax deduction for the SGC amount.
What if you need help?
We know mistakes can happen, and we’re here to support you to get it right. If you are late or make a mistake, make sure you lodge an SGC statement as soon as possible. You must do this even if you can’t afford to pay all of the SGC owed, and we can help you to establish a payment arrangement.
If you need to lodge an SGC statement, make sure to lodge it on time. If you lodge it late or fail to provide a statement or information when requested during an audit, you’ll also be liable for an additional Part 7 penalty which can be up to 200% of the SGC.
You can always contact us to discuss your circumstances and payment options.
Further information
We have a range of help and support tools available on the ATO’s website. For more information, refer to:
- ato.gov.au/superforemployers
- ato.gov.au/sget
- ato.gov.au/sgcalculator
- ato.gov.au/SuperRate
- ato.gov.au/contribution caps
Peta is acting Assistant Commissioner for Superannuation and Employer obligations in the ATO. An experienced tax professional with over 20 years’ experience, Peta started out as a tax accountant before joining the ATO and received her CPA in 2002. Peta has extensive experience across a number of diverse roles in the ATO. Starting out as a frontline business auditor and tax technical specialist, she then progressed onto strategic programs. Peta has a passion for identifying opportunities to challenge the status quo and create innovative team environments.
