How much super should businesses be paying employees?

30 September 2019

A healthy super fund is essential for a secure and comfortable life after work. While there are different ways you can grow your super, knowing the amount your employer should be contributing is key to keeping your balance on track.

In this article, we'll explore the minimum super amount businesses should pay each employee, what you can do if you're not receiving the correct amount, and what’s in place to ensure organisations behave as they should.

What is the Super Guarantee?

The Super Guarantee ensures that employers are helping their staff to save for their retirement by contributing to their super fund. The amount itself is calculated as a percentage of an employee's 'ordinary time earnings' (OTE), and is currently set at 9.5%.

While this may sound simple enough, there are a number of elements worth unpacking a little further:

  • Who should be paid the guarantee? For those over 18 years, you must earn over $450 before tax in a calendar month to be eligible for this scheme, and your position can be either full-time, part-time or casual.
  • What is OTE? This refers to how much you're paid for your standard work hours and includes extras such as allowances, shift loadings and commissions, but excludes overtime payments.
  • Are there any exceptions? For those under 18 to be eligible, you must work over 30 hours a week, in addition to fulfilling the other criteria.

Your employer must pay the Super Guarantee at least four times per year, and will be issued with quarterly due dates by the Australian Tax Office (ATO). These payments have to go to a complying super fund of your choice.

What happens if an employer doesn’t comply?

If employer contributions aren't submitted by the quarterly due date, a manager could face a Super Guarantee charge, which can include:

  • the shortfall amounts
  • an interest payment – currently this is set at 10%
  • administration fees of $20 per employee not paid, per quarter.

Not to mention, employers may face up to 12 months imprisonment if they don't pay their Super Guarantee liabilities – so it’s serious stuff.

What can you do if your employer isn't making their super contributions?

Firstly, although it may say so on your payslip, it’s important to check your super statement to see if you've received your employer contributions, and that you’re being paid at the correct rate.

If not, don't panic, there are a few steps you can take to easily resolve this:

  1. Ensure you're eligible – Check back under ‘What is the Super Guarantee?’ above.
  2. Contact us – A quick call or live chat online can determine whether it’s an administrative error.
  3. Talk to your employer – Chances are, if you haven't received the correct amount of super, it's simply an innocent mistake that will be easily resolved.
  4. Contact the ATO – If, after talking to your employer, you're still not satisfied that you're receiving the super you're owed you can contact the ATO, who will investigate your unpaid super for you.

Ultimately, as long as you meet the eligibility criteria, employer super contributions are your legal right. If you’d like to talk to us about this, we’re here to help.

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The information on this website is of a general nature only and does not take into account your personal objectives, situation or needs. You should consider obtaining professional financial, taxation and or legal advice tailored to your personal circumstances prior to making any financial decision.