Current at: 30 July 2008
SUPERANNUATION CONTRIBUTIONS - An Overview
Introduction
For superannuation purposes an “employee” includes directors, “labour only” and “substantially labour only” contractors. This information sheet provides an overview of what your obligations are for making superannuation contributions on behalf of these “employees”.
How Much Do I Have To Pay?
For each “employee”, you have to pay 9% of their “Ordinary Time Earnings” (“OTE”) unless that employee:
- receives less than $450 (gross) in a month;
- is under 18 years of age, working for not more than 30 hours per week;
- is aged 70 and over; or
- is paid to do work of a domestic or private nature for not more than 30 hours a week, e.g. a housekeeper
For an explanation as to what OTE is, click here.
Who Do I Pay?
You need to send the contribution to an approved superannuation fund. In some circumstances, you must send the contributions to a fund of the employee’s choice. For more information about “Choice of Super” and the procedures you need to follow, you can refer to those HIA information sheets that explain what “Choice of Super” is all about.
When Are The Due Dates?
You must make superannuation contributions on behalf of your “employees” at least once each quarter, by the following due dates:
Quarter Due Date
1st (1 Jul – 30 Sept) 28 October
2nd (1 Oct – 31 Dec) 28 January
3rd (1Jan – 31 Mar) 28 April
4th (1 Apr – 30 Jun) 28 July
When a cut-off date falls on a Saturday, Sunday or public holiday you can make payment on next working day after the cut-off date.
If you fail to make all or any of these payments by the due date or into the correct fund, you will incur a tax, which is called the Superannuation Guarantee Charge. It is therefore important that you make your contributions on time, especially as superannuation contributions are tax deductible but the Superannuation Guarantee Charge isn’t.
What About Paperwork?
For new employees, you need to include their Tax File Number Declaration when you send in the initial paperwork to the superannuation fund.
For all of your superannuation records (including for Choice of Super and those records required by the workplace laws, such as pay slips), you need to keep them in paper form (in English) for 5 years.