Who you contribute for
If you're an employer, you'll generally need to pay superannuation contributions for most of your employees, but there are exceptions in some cases.
If you're an employer, legislation requires you to pay Superannuation Guarantee (SG) contributions for most of your employees. This is paid into a complying superannuation fund, such as Media Super.
However, you are NOT required to make super payments for employees who are:
- paid less than $450 (before tax) in a calendar month (subject to exception under certain awards and agreements)
- aged under 18 years of age and working 30 hours or less per week
- non-residents being paid for work done outside Australia
- covered by bilateral superannuation agreements with other countries
- certain senior foreign executives who hold certain visas or entry permits, or
- paid to do work of a domestic or private nature for not more than 30 hours per week.
To work out if you’re an employer for superannuation guarantee purposes or whether your employees are eligible for super, visit the Australian Taxation Office (ATO) website.
Age restrictions on making contributions
Effective 1 July 2013, the government has removed the upper age limit applicable to the Superannuation Guarantee, allowing older workers to continue to grow their super if they are still working, regardless of their age.
Employers can claim tax deductions for SG contributions made for these employees.
Age restrictions still apply on additional concessional and non-concessional contributions.
|Contribution type||Employee's age|
|Mandated SG or award contributions||Accepted without restriction||Accepted without restriction||Accepted without restriction|
|Additional employer contributions, including salary sacrifice and self employed contributions||Accepted without restriction||Accepted providing member meets work test||Cannot be accepted|
|Voluntary after-tax contributions||Accepted without restriction||Accepted providing member meets work test||Cannot be accepted|
|Spouse contributions||Accepted without restriction||Accepted providing receiving spouse meets work test||Cannot be accepted|
Work tests for older employees
If the employee is aged between 67 and 74, any additional employer contributions (including those made under a salary sacrifice arrangement) and voluntary after-tax contributions made by the employee are subject to a work test.
To satisfy the work test, an employee must have been gainfully employed on a full or part-time basis for at least 40 hours in 30 consecutive days in the financial year.
No additional contributions can be made once the employee turns 75. Any super contribution made by an individual aged 74 must be received by the super fund within 28 days of the end of the month in which the individual turns 75 or it cannot be accepted.
The work test also applies to spouses aged 67-69 receiving spouse contributions from their partner.
Employer super contributions for contractor
Some contractors are considered employees for superannuation purposes.
If you have hired a contractor, and they:
- are remunerated wholly or principally for their personal skill and labour, and
- perform the contractual work personally, and
- are paid by reference to hours worked, rather than for the amount of work performed, then
the contractor is considered as an employee, and you are required to make a super contribution for at least that portion of their contract.
Visit the Australian Taxation Office (ATO) website and access the employee/contractor decision tool for help identifying workers.
Leave, workers' compensation and other payments
Employer contributions must be made on behalf of your employees while they remain in your employment. This includes employees who are on:
- annual, sick/carer’s, compassionate or long-service leave
- workers’ compensation, if the employee is performing duties while still injured.
This does NOT include:
- payments made in respect of jury service or accident make-up pay under the provisions of a relevant award or industrial agreement
- parental leave (unless agreed under a workplace or enterprise agreement)
- workers’ compensation payments, where the employee is not performing services.
If an employee is absent without pay, generally no employer contributions are payable.
For more information, visit the ATO website and access the Superannuation Guarantee decision tool.