Employer contributions

At first glance, employers’ responsibilities and obligations under the superannuation laws can seem complex, but they’re fairly straightforward once you look into it. Here’s what you need to know: 

1. Choosing a default super fund

Employers must choose a default fund for compulsory Super Guarantee contributions. As the term suggests, it’s the fund which you pay into, on an employee’s behalf if they haven’t nominated their own super fund or don’t already have a super fund when they commence working for you.

Choosing a default fund is a very important decision, as super is your staff's money, and you want to do the right thing by them. Industry SuperFunds not only perform well, they are run only to benefit your employees and do not charge joining or handling fees for your company’s super payments. Industry SuperFunds make it easy to administer your employees’ super contributions and they are MySuper authorised, so you can rest assured that you are providing your employees with a default fund which has low fees for members, historic strong returns^ and is run only to benefit them. Most Modern Awards list the default super funds that employers must choose from for their default funds. You can use our Default Super Fund Finder to get a list of Industry SuperFunds that are included on the list for each relevant award.

You must ensure that your default fund offers a MySuper product. MySuper is a low cost, simple super product that meets certain performance requirements. If your current default fund does not offer a MySuper product you will need to switch to a fund that does.

If an employee already has their own super fund or wishes to choose one, they can notify you of this when they first join your company, or they may change funds at any time during their employment. If they do change funds, the onus is on the employee to tell you. For more details about choice of funds, see the Super Rules page.

2. Employer superannuation contributions

Almost all employees in Australia are entitled to a superannuation contribution, paid by their employer into a super fund.

It doesn’t matter if the employee is full time, part time or casual (depending on income and hours). Even some contractors may be entitled to super contributions.

Visit the page on rules for employer contributions to see which of your employees you’ll need to make super contributions for.

3. The Super Guarantee system and enterprise agreements

Unless a specific enterprise agreement or award states otherwise, employers are required to pay a set rate of superannuation into each eligible employee’s super fund.

The rate is 11.5% of the employee’s income and is set to increase gradually over the next few years.

For super purposes, income includes regular wage plus commissions, shift loadings and some allowances but not overtime payments. However, overtime that is regularly rostered is included as income.

Most businesses make their super contributions to coincide with each payday. This is not compulsory, but contribution entitlements are calculated monthly and contributions must be made at least quarterly and reported regularly to the ATO.

Use this calculator to work out how much super you need to contribute to an employee’s super fund.

Employer super calculator

Income (before tax) weekly fortnightly monthly yearly Please enter an income amount Employer super contribution Please enter in the contribution rate. Contribution rate needs to be between 11.5% and 17% Is the employee 18 years old or over?

• Yes
• No

Does your employee work for more than 30 hours in a week?

• Yes
• No

See contribution amount

The super contribution amount is

$475 per month

Need a default fund for your employees? Reset

The super contribution amount is

$475 per month

You can make this contribution, however based on the information you have entered you may not need to make a super contribution for this employee for this period. You can confirm your obligation to pay SG with the ATO.

Need a default fund for your employees? Reset

The employee is not eligible for super because they are paid less than $450 (before tax) per month.

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Employer super calculator

Assumptions/Disclaimer

4. Reportable superannuation contributions

An employee may ask you to deduct extra super from their pre-tax income, and pay it into their super fund. This is called salary sacrifice and it gives the employee tax and retirement income benefits. In fact, salary sacrificing is an excellent way to boost retirement income. You must notify the ATO of all such payments in a Superannuation Payment Summary. Contributions made under the compulsory Super Guarantee system are not included on Payment Summaries.

5. Keep up to date

Australia’s super laws and regulations often change, even slightly. It’s important to keep up to date with new rules and obligations, however your default super fund should send you regular updates on changes to your responsibilities and procedures.

^Past performance is not a reliable indicator of future performance.