Paying your employees super – what you need to know

How often to pay your employees super

You must pay your employees the super they’re owed at least once a quarter by due dates (shown below). You can choose whether this is one payment, or multiple payments across the quarter. The frequency may depend on whether any employees are under an award or employment agreement that sets out a specific payment frequency. If this is in place, you’ll need to meet the payment criteria outlined.

Source: ato.gov.au

What to do if you miss a payment 

If you miss a super guarantee payment deadline, you’ll have to lodge a super guarantee charge (SGC) statement within one month after the SG due date. You’ll also have to pay the SGC to the ATO, which is not tax-deductible, and is made up of:

• The unpaid SG payments (those made after the payments deadline may reduce the SG charge you need to pay)
• Interest on the outstanding amount, and
• An administration fee.

To avoid the SGC, payments must be received by the employee's fund on or before the quarterly super due dates. 

You can download the SGC statement and work out how much you need to pay for each employee using the ATO SGC statement and calculator tool. It’s important to note, further penalties will also apply if you don’t lodge the SGC statement and pay the SGC by the due date.

From 1 July 2023, the superannuation guarantee increases to 11%

From 1 July 2023, the superannuation guarantee increases to 11%. It will continue to increase incrementally, at a rate of 0.5% each financial year, until it reaches 12% in 2025. AustralianSuper will keep members up to date with these changes. For more information on the rise to 12% visit ato.gov.au.

Tax deductions and due dates for super payments 

Making super payments on time isn’t just important for your employees, it’s important for your business. Employers who make SG contributions in line with the ATO’s deadlines can claim the payments as a tax deduction and will avoid paying a SGC to the ATO.

Providing Tax File Numbers (TFNs) 

Tax file numbers are an important part of the super payments process. When a new employee starts work with your business, they normally fill out an ATO Tax File Number Declaration form providing their TFN. As the employer, it’s your responsibility to pass the employee’s TFN to their super fund. For new employees, you must provide their TFN to their super fund more than 14 days before you make their first contribution. For existing employees, you have 14 days when you receive it to give their TFN to their super fund.

There is no need for you to provide AustralianSuper the employee's completed Tax File Number Declaration form. Simply providing the employee Tax File Number will be sufficient. 

Reporting extra SG payments to the ATO

If you pay your employee extra super contributions, for example from a bonus or via salary sacrificing, you may need to report the payments to the ATO. These extra contributions could influence any government payments your employees may receive. For example, family tax benefits, child support payments and government co-contributions. You can do this by reporting any extra super paid through Single Touch Payroll or as an item on your employee’s PAYG Payment Summary and Payment Summary annual report to the ATO.

In most cases, a business doesn’t need to report on the basic levels of SG. 

Paying contractors super 

Many people in Australia work as contractors, so it’s important to know the relevant super rules. In most cases, if your business pays a contractor for their labour, the government will consider them to be an employee for super purposes. That means you’ll need to pay the 11% SG, even if they have their own Australian Business Number (ABN).

If your contract is with someone who doesn’t provide the labour (such as a company, trust or partnership), you don’t need to pay super to that person.

The ATO has more information on paying contractors super.

Maximum SG payment caps

A rule called the Maximum Contribution Base puts a limit on the amount of SG an employer must pay an individual employee in a single quarter or financial year. For the 2023/2024 financial year, this limit is $62,270 a quarter or $249,080 a year². Anything earned above that limit doesn’t have to have super paid.

For employees whose OTE is higher than the maximum contribution base, you may still pay super based on 11% of OTE, if they're required to under an award or agreement.

However, the extra contributions aren't compulsory, and you should keep in mind the concessional contribution limits.

Choosing a default super fund 

Employers must allow their eligible employees to nominate their own super fund, by giving them a Standard choice form (PDF) when they start work. However, not all of your employees will choose a preferred fund. Therefore, your business should also nominate what’s called a ‘default fund’ to make sure you can pay super.

Choosing a default fund is an important decision. It helps to look for a fund that works for both you and your employees.

DISCOVER SUPER FOR YOUR BUSINESS

Get help to make your electronic super payments

QuickSuper clearing house, from AustralianSuper 

One way to meet your SuperStream requirements is to pay super through a compliant ‘clearing house’, such as QuickSuper³.

QuickSuper is free for businesses if they have an employee with AustralianSuper. A clearing house also makes it easy to pay employees across multiple funds. Rather than making separate payments to each employee's super fund, you can just make one payment. The clearing house divides the money accurately and pays it into the correct funds and accounts.