Superannuation Guarantee Payments

Superannuation Guarantee (SG) payments are the minimum amount of super guarantee for your employee to provide for their retirement.

The SG is currently 10.5% of an employee’s ordinary time earnings. You must pay SG at least four times a year by the quarterly due dates, no later than 28 days after the end of each quarter. If you don’t pay the minimum amount of SG into the correct fund by the allocated due date, you could be required to pay the super guarantee charge. Where an employee is covered under an employment agreement or award that specifies a contribution higher than 9.5%, that higher rate must be paid.

Penalties can also be levied for non payment including fines, fees and interest, plus a business could lose their tax deduction for super contributions. For these reasons, keeping on top of your SG payments and avoiding payment of superannuation guarantee charges is vital.

Peter Vickers Business Group was have a wealth of experience helping businesses, small to large, manage their SG obligations, meet deadlines and comply with all ATO requirements.

When does the SG apply?

If you pay an employee (full time, part time or casual) $450 or more (before tax) in a calendar month, you have to pay SG on top of their wages. If your employee is under 18 or is a private or domestic worker, they must also work for more than 30 hours per week to qualify. The SG must be paid until the employee reaches the age of 70.

Super must also be paid for allowances paid for ordinary hours of work such as "on call" allowances. However it is not payable on expense allowances and reimbursements as these are not considered to be salary or wages.

What about salary sacrifice?

Where an employee has entered into a salary sacrifice arrangement their ordinary time earnings (OTE) is reduced and as a result this reduces the amount of super guarantee that's payable.

Superannuation guarantee on long service leave payments

A common question we hear is "Is superannuation paid on long service leave?” The ATO advises that this will depend on how the leave is taken. The employer must pay super along with the employee’s ordinary time earnings (OTE) while they are still employed. However, where the leave is paid as a lump sum on termination they would usually not be entitled to receive super. Long service leave is a statutory benefit which is paid at the employee’s ordinary pay rate, and SG payments must be made for all current employees.

Let us take the stress out of managing your SG obligations

At Peter Vickers Business Group, we will ensure our clients meet with all the compliance requirements and avoid payment of superannuation guarantee charges. We will also provide professional advice on all clients queries in relation to SG entitlements, ATO obligations, calculations, back pay, due dates etc.

With over 40 years experience delivering exceptional accounting, finance, investment, super and insurance services in Sydney we can help you achieve your personal and business financial goals, call or email us today.

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