Damon Mcknight
In Australia, employers are required to pay superannuation (also known as super) to their employees, which is money set aside for their retirement. The Superannuation Guarantee (Administration) Act 1992 outlines that employers must pay a minimum of 12% of their employee's ordinary time earnings (OTE) as super. This legislation also states that employers must pay super at least four times a year and keep accurate records of these payments. If employers fail to meet these obligations, they may face penalties, including fines and imprisonment for company directors. Employees who believe they are not receiving their super entitlements can take steps to investigate and resolve the issue, such as discussing it with their employer or seeking assistance from their super fund, union, or the Australian Taxation Office (ATO).
| Characteristics | Values |
|---|---|
| Employees eligible for super guarantee | All employees over 18 years old, including full-time, part-time, casual, and temporary residents of Australia. Employees under 18 must work more than 30 hours a week to be eligible. |
| Employer obligations | Employers must pay SG a minimum of 4 times a year. They may pay more frequently, such as with salary payments. |
| Super guarantee rate | 12% of the employee's ordinary time earnings (OTE). |
| Non-resident employers | Not required to pay super for resident employees for work done outside Australia. |
| Self-employed or partnerships | Not required to pay super guarantee for themselves but can choose to do so. |
| Military reserve members | Employers are not required to pay super guarantee for members of the army, naval, or air force reserve for work in that role. |
| High-income earners with multiple employers | Employers are not required to pay super if the employee requests an exemption and has an SG employer shortfall exemption certificate. |
| Australians working temporarily overseas | Employers must pay super for these employees and should apply for a certificate of coverage. |
| Independent contractors | If paid mainly for labour, they are considered employees for SG purposes and are entitled to SG contributions. |
| Domestic or private workers | Employers must pay super guarantee if they work more than 30 hours a week, regardless of earnings. |
| Non-payment consequences | Employers who do not pay the correct super may have to pay a Superannuation Guarantee Charge (SGC) with interest and an administration fee. The ATO can issue penalty notices, and failure to comply can result in fines and imprisonment for company directors. |
| Employee actions | Employees can discuss unpaid super with their employer, seek help from their super fund or union, and report unpaid super to the ATO for investigation. |
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What You'll Learn
Employee eligibility for super payments
In Australia, employers must pay superannuation for their employees, and employees are eligible for super guarantee contributions from their employers.
Eligibility Criteria
- Age: Employees must be over 18 years old to be eligible for super guarantee contributions. If the employee is under 18, they must work more than 30 hours a week to be eligible for compulsory super contributions.
- Employment type: It does not matter if the employee is full-time, part-time, or casual. Even temporary residents of Australia, such as those on working holidays, are eligible for superannuation contributions.
- Earnings: Before July 1, 2022, employers did not have to pay the super guarantee for workers earning less than $450 a month. However, this threshold may have changed, so it is important to check the latest eligibility criteria.
- Contractors: Contractors who are paid mainly for their labour are considered employees and are thus eligible for super guarantee contributions.
- Domestic workers: Employers must pay the super guarantee for domestic or private workers if they work more than 30 hours a week, regardless of earnings.
- Australian employees working overseas: Employers must continue to pay super contributions for Australian employees working temporarily in another country. They should apply for a certificate of coverage to avoid paying super in the other country.
Employee Rights and Employer Obligations
Employees have the right to choose their super fund. Employers must offer eligible employees a choice of super fund and provide them with a standard choice form. Employers must pay super contributions for eligible employees at least four times a year by the quarterly due dates or more frequently if required.
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Employer obligations and penalties
In Australia, employers are generally obligated to contribute to their employees' superannuation. Employers must pay the super guarantee (SG) a minimum of four times a year, and they can pay more frequently, such as with salary payments. The SG rate is 12% of an employee's ordinary time earnings (OTE). Employers must pay super for Australians working temporarily overseas and should apply for a certificate of coverage. Employers also must pay super for independent contractors if they are paid mainly for their labour.
If an employer does not pay the correct super for their employees, they may have to pay a Superannuation Guarantee Charge (SGC), which includes the shortfall amount, interest (currently 10%), and an administration fee (currently $20 per employee, per quarter). Employers must also keep accurate superannuation records. If an employer does not pay the SGC, the Australian Taxation Office (ATO) can issue a penalty notice, and failure to abide by this can result in significant fines and possible imprisonment for company directors.
The Fair Work Ombudsman (FWO) can help employees pursue their entitlements, including going to court. The ATO can investigate shortfalls in contributions required under the SG rate, and the FWO can receive payments from employers for outstanding wages and entitlements. Employees can also seek an order from an eligible court under the Fair Work Act 2009.
Employees should first try to discuss unpaid super with their employer, as an open discussion may be the most effective way to resolve the issue. Employees can use tools provided by the ATO and other super funds to check if they are eligible to receive super and how much they should be paid.
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Payment methods and frequency
In Australia, employers are required to pay super contributions at least four times a year, with quarterly due dates. However, employers may choose to pay more frequently, such as weekly, fortnightly, or monthly, to align with salary payments. This increased payment frequency provides employees with greater visibility over their super contributions and supports better retirement outcomes, especially for those in lower-paid or casual work.
Employers can use SuperStream, the superannuation data and payment standard, to make contributions. SuperStream allows employers to make all their contributions in a single transaction, even when paying into multiple super funds. Additionally, employers need to report payroll information to the Australian Taxation Office (ATO) using Single Touch Payroll (STP). Small businesses with fewer than 19 employees or an annual turnover of less than $10 million can utilise the Small Business Superannuation Clearing House (SBSCH) for free to make their superannuation guarantee contributions.
The super guarantee (SG) rate is 12% of an employee's ordinary time earnings (OTE). The OTE represents the amount paid for an employee's ordinary hours of work. If an employer misses a quarterly payment or makes a late payment, they must lodge an SG statement and pay the super guarantee charge (SGC), which includes the shortfall amount, interest, and an administration fee.
It is important to note that employers must pay the SG for all employees aged 18 and over, regardless of their employment status (full-time, part-time, or casual) or earnings amount. Employees under 18 are eligible if they work more than 30 hours per week. Additionally, employers must pay the SG for independent contractors if they are paid mainly for their labour.
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Recovering unpaid super
If you think your employer is not paying your superannuation, or is not paying the right amount, there are ways to check and recover unpaid super. Firstly, you need to make sure you are eligible to receive super. Generally, you're entitled to super guarantee contributions from an employer if you are over 18 years old. It doesn't matter if you're full-time, part-time, casual, or a temporary resident of Australia. If you're under 18, you must work more than 30 hours per week to be eligible for compulsory super contributions. You may also be eligible if you're a contractor.
If you are eligible, check how much has been paid into your super fund by looking up your super account in ATO online services. If you've left a job and are no longer in touch with your previous employer, check whether your super has been paid into a different fund than the one you expected. You can keep track of your super online using ATO online services. If you think your super entitlements have not been paid into the right fund, check if you're eligible to choose a super fund.
If you know how much super hasn't been paid and the period it relates to, you can try discussing your unpaid super with your employer before reporting them. If they've made a simple mistake, an open discussion might be the most effective way to resolve the issue. If you've confirmed your super still hasn't been paid correctly, you can report unpaid super contributions using the ATO's online tool. You can also lodge a referral after the lodgment due date for any periods that appear to be unpaid.
There are other ways to claim your unpaid super, such as through the legal system and the Fair Work Ombudsman (FWO). The FWO may be able to help you if you haven't received all your workplace conditions and entitlements. They may ask you to complete a wages and conditions claim form and pursue your entitlements on your behalf, including going to court. If you're employed under the national workplace relations system, you can seek an order from an eligible court under the Fair Work Act 2009. If you're employed under one of the state industrial relations systems (in NSW, Queensland, South Australia, Western Australia, or Tasmania), each state has laws that enable the courts to order your employer to pay the shortfall amount to your super fund.
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Worker entitlements and rights
In Australia, workers are entitled to a superannuation guarantee (SG) contribution from their employer, regardless of their employment type (full-time, part-time, casual, fixed-term, or temporary resident). If you are over 18, you are entitled to superannuation guarantee contributions. If you are under 18, you must work more than 30 hours per week to be eligible for compulsory super contributions. Domestic workers are also entitled to SG if they work over 30 hours per week. If you are an independent contractor paid mainly for your labour, you are considered an employee for SG purposes and are entitled to employer SG contributions.
The super guarantee rate is 12% of an employee's ordinary time earnings (OTE). Employers must pay a minimum of four times a year and can pay more frequently, such as weekly or fortnightly.
If you believe your employer is not paying superannuation or is paying an insufficient amount, you can check your super fund online using ATO online services. You should also discuss the issue with your employer, as they may be able to resolve the issue. If you are uncomfortable speaking with your employer, you can contact your super fund or union for assistance.
If you are still unable to resolve the issue, you can report unpaid super by lodging an enquiry with the Australian Taxation Office (ATO), who can investigate shortfalls in contributions. Additionally, the Fair Work Ombudsman (FWO) may be able to help you claim unpaid super by pursuing your entitlements, including going to court.
It is important to note that employers who do not pay the correct super for their employees may face penalties, including significant fines and possible imprisonment for company directors.
In addition to superannuation entitlements, workers in Australia have other rights and protections in the workplace. These include the right to equal opportunity, non-discrimination in access to employment, safe working conditions, and the right to form and join trade unions.
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Frequently asked questions
If you think your employer is not paying your superannuation, you should first check that you are eligible to receive super. Generally, you are entitled to super guarantee contributions if you are over 18 years old, working more than 30 hours per week, and are a contractor who is paid for your labour. If you are eligible, you should try to discuss your unpaid super with your employer before reporting them. If this doesn't work, you can report unpaid super by lodging an enquiry with the Australian Taxation Office (ATO).
Employers who do not pay the correct super for their employees may have to pay a Superannuation Guarantee Charge (SGC) which includes the shortfall amount, interest, and an administration fee. The ATO can take stronger action if an employer doesn't pay the charge, including issuing a penalty notice. Failure to abide by a penalty notice can result in significant fines and possible imprisonment for company directors.
Employers must pay super guarantee contributions to their employees, regardless of how much they are paid. The super guarantee (SG) is the minimum amount of super that must be paid to employees, and it is currently 12% of an employee's base earnings. Employers are required to pay SG a minimum of 4 times a year and keep accurate superannuation records.
