Superannuation
6. Employers & Superannuation
Authors: Staff Legal Eagle
Firm / Chambers:
Last updated: 27 Aug 2015
- An employer is someone who employs a person on a full-time, part-time or casual basis either under a written or verbal employment contract. Under the law an employer may be an authority, organisation, corporation, person or other entity.
- In Australia under a superannuation guarantee scheme an employer must make super contributions of at least 9.5% of their employee’s salary if their employee is paid $450 or more before tax per month. Some employers may be obliged to pay additional super dependent on industry awards.
- To be eligible for the scheme the employee:
- must be over 18 years of age; or
- if under 18 years of age the employee must work more than 30 hours a week.
- The payments must be made at least every three months directly into the employee’s nominated superannuation account.
- If an employer does not pay their employee the correct amount of super they may be fined by the ATO and be required to make up the shortfall with interest. If the employer does not make the payments on time they have to lodge a superannuation guarantee charge statement with the ATO.
- An employer must keep proper records to show the amount of super paid to each employee.
- Additionally if an employee provides an employer with their Tax File Number (TFN) the employer must pass the TFN to the employee’s super fund.
- If you enter into a salary sacrifice agreement with your employee then the payments you make under the super guarantee scheme are calculated on the reduced salary.
- There is no legal obligation for employers to offer their employees a salary sacrifice arrangement. Some industry awards may impose an obligation on an employer to offer a salary sacrifice arrangement. If you are an employer and are unsure about your obligations under superannuation and tax law you should both speak to a financial adviser and get legal advice. You can use our free Find a Lawyer directory to contact a lawyer near you.
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