Your employer obligations
Employers in Australia are required to comply with the provisions of the Superannuation Guarantee (Administration) Act 1992 (SG). The Act requires Employers to pay 9% of Ordinary Time Earnings (OTE) into a complying superannuation fund.
From 1 July 2013 this increases to 9.25%.
There are a number of circumstances when you do not have to pay super for employees. Please visit the ATO website for further details. Some examples are employees who:
- Earn less than $450 per calendar month
- Are age 70 or over*
- Are under age 18 and working less than 30 hours per week
Employers need to pay super for employees who receive a superannuation pension or annuity while they are still working.
From 1 July 2013 there is no longer an age limit, staff aged over 70 are eligible for compulsory super contributions.
Ordinary Time Earnings
All real estate employers are required to pay SG contributions based on ‘Ordinary Time Earnings.’
Ordinary Time Earnings are an employee’s earnings in relation to ordinary hours of work (including over-award payments, bonuses, commission, shift allowances and paid leave.)
For a more detailed explanation of ordinary time earnings and a checklist for salary and wages and ordinary time earnings, refer to the ATO site.
SG Contribution Deadlines
SG payments for eligible employees are required to be received by a complying super fund by cut-off dates. Each quarter is detailed below:
Q1 1 July to 30 September
Q2 1 October to 31 December
Q3 1 January to 31 March
Q4 1 April to 30 June
Where the cut-off date falls on a weekend or public holiday, payment may be made on the next working day after the cut-off date.
Late payments will result in loss of tax deduction for the payment and other potential penalties.
Maximum Superannuation Contribution Base
There is a maximum limit on the amount of super support you are required to provide for your employees. This amount is indexed each year.
In 2012/13 employers are required to pay superannuation guarantee contributions on earnings up to $45,750 per quarter (i.e. $183,000 pa, assessed quarterly).
This means that if employees earn more than this figure in a financial quarter you are not obligated to pay super on their excess earnings.
It also means that if an employee earns $60,000 one quarter and nothing the next quarter, that you pay 9% on the $45,750 the first quarter and nothing the next.
Note: Employers may be obligated to contribute above these limits under any industrial awards or workplace agreements in place.
If you have questions about how this applies to you please contact us.
For 2013/14 the maximum superannuation contribution base is $48,040 per quarter. Please note that this is subject to being made law.
What if contribution limits are exceeded?
If the contribution limits are exceeded, an additional tax of 31.5% (including the Medicare levy) will be payable on top of the standard 15% tax rate on any contributions that exceed the limit. The additional tax payable will be assessed by the Australian Tax Office and payable by the Fund member. Members can ask REI Super to pay the additional tax from their account. Below is a summary of when contributions can be made according to age.
9% SG Contributions
Award Employer Contributions
Voluntary Employer Contributions
Member (after tax) Contributions
Salary sacrifice (pre-tax Member) Contributions
* If gainfully employed at least 40 hours in a period of not more than 30 consecutive days during the same financial year in which the contributions are made.
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