What Is The Superannuation Guarantee?

Ever since the $450 threshold was removed on 1 July 2022, just about all Australian workers are now required to be paid superannuation regardless of how much they are paid. The ATO specifies that this applies to full-time, part-time or casual workers; a temporary resident such as a back packer; family members working in your business; and company directors.

There are some additional eligibility rules for some types of workers such as domestic or private workers, which need to be paid super if they work more than 30 hours a week for you. You must pay contractors superannuation as well if you pay them mainly for their labor and regardless of whether or not they quote their ABN.

The Superannuation Guarantee was just 3% when it was first introduced in 1992 and increased incrementally to 9% in 2002. It has since risen to 11% and will increase to 12% over the next few years as the below table indicates.

Because superannuation was introduced by a Labor government, there has been ongoing conflict between the two major parties in Australia about the SG and whether or not, and by how much, it should be increased over time.

In 2012, former Prime Minister Julia Gillard legislated the superannuation guarantee be increased to 12% by 2019 but that was delayed by the Abbott government in 2014 as seen in the table above.

Fortunately, both parties appear to have now reached a consensus about the appropriateness of a higher SG level to ensure Australians experience a comfortable retirement, with the former Liberal government agreeing to the schedule of increases to 12%.

The superannuation guarantee charge (SGC) is the penalty an employer must pay if they do not pay their workers their superannuation guarantee on time.

The SGC is actually made up of a number of charges. It includes the worker’s super which hasn’t been paid on time or to the right fund; a choice liability if it has been paid to the incorrect fund (or if the employee wasn’t given a standard choice form within the required timeframe) capped at $500; nominal interest of 10% per annum from the start of the relevant quarter; and an administration fee of $20 for each employee that wasn’t paid correctly per quarter.

The Australian Taxation Office has made a free calculator available for employers to work out what they owe here. Employers also need to lodge a an SGC statement to the ATO.

While your superannuation amount may appear on your pay statement in weekly, fortnightly or monthly amounts, your employer is only legally required to pay it quarterly as per the below schedule.

Quarterly super payment due dates

If your employer isn’t paying your superannuation you need to report it to the ATO via this tool and the ATO will investigate it for you.

However, they can only investigate once the employer’s due date for lodging their SGC has passed, which is a month after the payment due date outlined in the table above.

You will need to give the ATO permission to use your name when contacting your employer about your unpaid superannuation, although you may qualify for protection as a tax whistleblower. You can also make an anonymous tipoff here.

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