Legislation requires you to contribute a minimum of 9% of your employees' Ordinary Time Earnings (OTE) on their behalf into superannuation. This rate will increase gradually from 9% to 12% starting from 1 July 2013.
Superannuation guarantee (SG) contributions are calculated as per the formula below:
SG = Ordinary Time Earnings (OTE) x SG contribution rate
OTE is the total of your employee's earnings in respect of:
- ordinary hours of work
- over award payments, shift loading, commissions and bonuses
- payments for leave taken.
OTE does not include any payments relating to overtime, payments for leave upon termination, reimbursement of expenses or leave loading. You are also not required to pay SG on parental and eligible community service leave (such as jury duty).
For more information on OTE, visit the ATO's law website at law.ato.gov.au and enter 'SGR 2009/2' in the search box.
The maximum contribution base per quarter in 2012/13 is $45,750. However, you can still contribute amounts above this if you wish. Please note that contribution limits apply.
You, as an employer, are responsible for complying with SG legislation. Otherwise, penalties may apply.
Exclusions for SG contributions
There are occasions when you are not required to pay SG for your employees. The most common examples are if your employee is:
- paid less than $450 in a calendar month
- age 70 and over
- under age 18 and working 30 hours or less a week
- paid to do work of a domestic or private nature for not more than 30 hours per week
- a non-resident doing work outside Australia.
Quarterly cut-off dates
SG contributions are required to be paid to a complying super fund at least every quarter.
|SG quarter||Cut-off date for payment of SG|
|1 July - 30 September||28 October|
|1 October - 31 December||28 January|
|1 January - 31 March||28 April|
|1 April - 30 June||28 July|
If the cut-off date for payment falls on a weekend or public holiday, the ATO grants a concession to make the payment by the next business day. However it is better to make the payment in good time to meet the quarterly deadlines.