The Superannuation Guarantee (SG) is a Government initiative that was introduced on 1 July 1992 to provide most employees with a minimum level of superannuation and therefore better income support for retirement.
How much do you need to pay?
Under the SG, employers must contribute 9% of an eligible employee's earnings to a complying super fund once their earnings reach $450 per month (other conditions may also apply). See 'Are all employees eligible for SG contributions?' below.
When are SG contributions due?
The HOSTPLUS trust deed requires you to pay SG contributions monthly. But if your business is not bound by an award or agreement stipulating monthly contributions, you may apply to HOSTPLUS to make your contributions payments quarterly.
If you’re not sure which payment option your business should choose, just call 1300 HOSTPLUS (1300 647 875).
Important Superannuation Guarantee dates
|
| SG quarter |
SG Contribution
due date |
| 1 July - 30 September |
28 October |
| 1 October - 31 December |
28 January |
| 1 January - 31 March |
28 April |
| 1 April - 30 June |
28 July |
When are personal after-tax contributions due?
Under the Superannuation Industry (Supervision) Act 1993, employers are required to forward any personal contributions deducted from their employees’ after-tax salary or wages to their super fund within 28 days following the end of month in which the deductions were made.
For example, if your employee arranges to make a personal contribution, which is deducted from their pay in May, you must forward that contribution to HOSTPLUS by 28 June.
What happens if you miss the SG contribution due date?
If you miss the SG contribution due date (as shown above), you can pay the outstanding SG contribution payment to the fund and lodge an SG charge statement and pay the SG charge to the ATO. The SG charge comprises:
Any SG contribution shortfall amounts (including any choice liability if applicable)
10% pa interest* (to the 28th or to the date the SG charge is actually paid), plus
a $20 administration fee per quarter per affected employee.
Importantly, unlike most superannuation contributions, the SG charge is not tax deductible. Other penalties may also apply.
* Calculated on a daily compounding basis.
For example:
Joe is an employer and is required to pay $1,000 in SG contributions to HOSTPLUS on behalf of his employee, Caroline, for the quarter 1 January - 31 March. Joe finally pays Caroline’s SG contributions on 15 June. Joe is now required to fill out a SG charge statement and he can either pay the SG component to the fund with the interest and admin costs payable to the ATO or Joe can pay the whole amount to the ATO.
| Example - Joe and Caroline |
Outstanding SG contribution
amount (plus choice liability,
if applicable) |
$1,000.00* |
Caroline's outstanding
contribution amount for the
quarter 1 January - 31 March.
This amount can be paid to
HOST PLUS or to the ATO
along with the charge |
| Nominal interest (10%) |
$45.20
($1,000 x 165 days
/365 x 0.1 = $45.20) |
Caroline's lost interest.
This is calculated on a
daily basis from 1 January
- 15 June = 165 days |
| Administration fee |
$20.00 |
This amount is payable to
the ATO for each affected
employee |
Total amount payable to the
ATO if the SG component is
paid to HOSTPLUS |
$45.20 + $20.00
= $65.20 |
This amount is payable to
the ATO by Joe. The ATO
will then forward the interest
component to Caroline's account |
* Assuming no choice liability.
For more information and a copy of the SG Charge statement, visit www.ato.gov.au
How do you determine the super contribution payable for eligible employees? The amount is based on the SG contribution rate (that is 9%) and an employee's earnings base. The earnings base is usually specified in a super fund's Trust Deed, an industrial Award or an existing agreement made with an employee. The earnings base will normally be the employee's ordinary time earnings (OTE). You simply multiply the employee's earnings base by the SG rate to determine how much you need to contribute.
Examples
Sarah is 35 and works 30 hours* a week. This month she worked 120 hours at $16 per hour, which equals $1,920. Her employer must contribute 9% super, which is $172.80 for the month.
Mark is 17 and works 25 hours per week. His employer does not need to pay super as he is under 18 and working less than 30 hours* per week.
Sam is 20 and works on a casual basis with his employer and earns $14 per hour. Last month he worked 30 hours and earned $420. His employer did not need to make a contribution that month as he was paid less than $450*. This month however, Sam worked 40 hours and earned $560 so his employer has paid $50.40 (9% x $560) to Sam's super account.
*Some Awards may specify a lower threshold.
Changes to OTE from 1 July 2008 The Superannuation Guarantee (SG) requires employers to pay a minimum of 9% of an employee’s notional earning base. For most employees’, the notional earnings base is pay for their normal working hours (excluding overtime) and is usually called ordinary time earnings (OTE). OTE also includes shift loading, commissions, most bonuses and casual loadings.
Some employees’ earning bases are contained in awards, industrial agreements, laws of the Commonwealth, States or Territories, or in pre-existing trust deeds or other rules of applicable employer sponsored superannuation schemes.
This can mean that some employees are paid lower superannuation contributions as a proportion of total remuneration. From 1 July 2008, employers must contribute 9% of an employee’s OTE, so that all employees earning the same amount get the same SG.
There are penalties for employers who don’t comply with these changes. Visit the ATO website at www.ato.gov.au/super for more information.
You can call 1300 HOSTPLUS (1300 467 875) or visit hostplus.com.au for more information or a copy of our HOSTPLUS Employer Guide Product Disclosure Statement .