Superannuation Guarantee: What is the maximum SG employers must pay?

Q: I am earning a salary of $270,000 including super. I am aged 42 and I am planning my super contributions for the 2014/2015 year. I understand a maximum contribution level applies based on a 9.5% SG contribution, before the balance up to $30K limit can be made on a salary sacrifice basis. Can you please confirm what the maximum SG contribution is allowed to be for the 2014/2015 year, based on $270,000?

A: For the benefit of other readers, I will first explain the $30,000 limit you refer to in your question. For the 2014/2015 year, the concessional (before-tax) contributions cap for anyone aged 48 years or under on 30 June 2014 is $30,000. If you’re 49 years or over on 30 June 2014, and then your concessional cap is $35,000 for the 2014/2015 year.

An employer’s Superannuation Guarantee contributions count towards an individual’s concessional contributions cap, in addition to any voluntary salary sacrifice or tax-deductible super contributions, which means that the question that you ask is important for many of our readers considering making additional contributions.

You will need to verify your personal entitlements with your employer, your accountant or the ATO, but I can provide a general response. Note that the SG percentage increases to 9.5% from July 2014 (previously it was 9.25%).

For the 2014/2015 year: The Maximum Superannuation Contribution Base for the 2014/2015 year is $49,430 per quarter, which annualised works out to $197,720. What this means is that the maximum SG obligation for an employer is 9.5% of $49,430 per quarter, which translates into $4,695.85 of SG per quarter. The maximum annual SG obligation for the 2014/2015 year works out to be $18,783.

For the 2013/2014 year: The Maximum Superannuation Contribution Base for the 2013/2014 year is $48,040 per quarter, which annualised works out to $192,160. What this means is that the maximum SG obligation for an employer is 9.25% of $48,080 per quarter, which translates into $4,443.70 of SG per quarter. The maximum annual SG obligation for the 2013/2014 year works out to be $17,775.

For the 2012/2013 year: The Maximum Superannuation Contribution Base for the 2012/2013 year was $45,750 per quarter, which annualised works out to $183,000. What this means is that the maximum SG obligation for an employer is 9% of $45,750 per quarter, which translates into $4,117.50 of SG per quarter. The maximum annual SG obligation for the 2012/2013 year works out to be $16,470.

For the 2011/2012 year: The Maximum Superannuation Contribution Base for the 2011/2012 year was $43,820 per quarter, which annualised works out to $175,280. What this means is that the maximum SG obligation for an employer is 9% of $43,820 per quarter, which translates into $3,943.80 of SG per quarter. The maximum annual SG obligation for the 2011/2012 years works out to be $15,775.20.

Note: You will need to verify the SG calculations with your employer and/or your accountant.

The following SuperGuide article explains the Maximum Superannuation Contribution Base in more detail, including the MSCB for previous years:

© Copyright Trish Power 2009-2014

Copyright for this article belongs to Trish Power, and cannot be reproduced without express and specific consent.

IMPORTANT: SuperGuide does not provide financial advice. SuperGuide does not answer all questions posted in the comments section. SuperGuide may use your question or comment, or use questions from several readers, as the basis for an article topic that we publish on the SuperGuide website. We will not disclose names or personal information in these articles. Comments provided by readers that may include information relating to tax, superannuation or other rules cannot be relied upon as advice. SuperGuide does not verify the information provided within comments from readers. Readers need to seek independent advice about their personal circumstances.

Comments

  1. Hi Trish
    I’m an IT contractor with my own Pty Ltd company, so I’m both employer and employee at the same time. In my employee role, my personal contribution limit for Super is $35k (I’m over 60) for FY 13/14. What’s the upper limit I’m allowed to contribute in my employer role? The minimum is 9 25%, but what’s the maximum, and can that be contributed in addition to the $35k I’m allowed to contribute as an employee?

  2. Hi there,

    In this example, say this person also received a performance bonus of $30,000 above and beyond the base $271,000.

    Would the $30,000 perfomance bonus be subject to 9% superannuation? If so, why is this, given that the $271,000 base already is above the maximum super contribution.

    Regards
    alpha

  3. You earn that much and are worried about Superannuation. Sheeeesh

  4. Ian Wheeler says:

    Hi Trish,

    Does an employee who has reached the annual cap of $25,000 concessional contributions have the right to request that any further superannuation payments in that tax year be paid to them directly and taxed as part of their salary rather than exceeding the cap ?

Leave a Comment

*