If you work as an employee, and you satisfy certain minimum requirements, your employer must pay Superannuation Guarantee (SG) contributions on your behalf, to a super fund.
Here is a list of 10 of the most important SG facts that you need to know:
- Your employer must make super contributions, at least quarterly, based on an annual entitlement of 9 per cent of your ordinary earnings. From July 2013, the required percentage increases to 9.25 per cent, and will gradually increase to 12 per cent by July 2019 (subject to the legislation receiving royal assent). For more information on the SG increase see SuperGuide article Superannuation Guarantee set to jump 33%
- You must earn at least $450 a month to be eligible for SG. If you do private or domestic work, such as babysitting, gardening or cleaning, then you must work at least 30 hours, and earn at least $450 a month to be eligible for SG. For more information see SuperGuide article Super for beginners, part 23: My pay changes every week. Am I paid the right super?
- If you’re less than 18 years old, then you must work at least 30 hours and earn at least $450 a month to be eligible for SG. For more information see SuperGuide article Super for beginners, part 2: My first job
- If you are aged 70 or over, you are not entitled to SG until the 2013/2014 financial year. From July 2013, eligible individuals aged 70 and over will receive SG contributions from employers. For more information see SuperGuide article SG to be paid for over-70s from July 2013
- Your super entitlement must be paid to your super fund at least every three months. If not paid, you can complain to the Australian Tax Office. For more information see SuperGuide article Super for beginners, part 18: My employer hasn’t paid my SG. What can I do?
- If you’re a high income-earner, then your SG entitlement is subject to a cap, known as the maximum contributions base. For the 2011/2012 year, your employer is required to make SG contributions on 9 per cent of salary up to an annual salary limit of $175,280 ($43,820 each quarter). For more information see SuperGuide article Superannuation Guarantee: What is the maximum SG that my employer must pay?
- When you start a new job, check whether your pay is $x plus super, or $x including super, and what that means for your total remuneration package. For more information see SuperGuide article That’s not fair! (No 1): Salary sacrifice can cause a SG pay cut
- Be careful when negotiating salary sacrifice arrangements — your employer could cut your SG due to the quirks of the salary sacrifice rules. For more information see SuperGuide article Superannuation Guarantee: What is the maximum SG that my employer must pay?
- If you’re self-employed you may still be eligible for SG in certain circumstances. You can find more information about contractors and SG by phoning the Australian Taxation Office’s Superannuation Infoline on 13 10 20, or by visiting the ATO’s website at <www.ato.gov.au>.
- Your employer’s SG contributions count towards your concessional (before-tax) contributions cap. For more information, see SuperGuide article Super concessional contributions: 2011/2012 survival guide