- 1. Superannuation Guarantee rate of 9.5%
- 2. You must earn at least $450 a month
- 3. Under-18s must earn $450 plus work at least 30 hours
- 4. Over-70s also entitled to SG
- 5. SG paid quarterly, at a minimum
- 6. SG cap for high-income earners
- 7. Is your pay quoted before/after super?
- 8. Don’t let your salary sacrifice cut your SG
- 9. Substantially self-employed but still receive SG
- 10. SG contributions count towards concessional cap
Note: The Superannuation Guarantee rate is 9.5% for the 2016/2017 year (from 1 July 2016 to 30 June 2017). The SG rate will now remain at 9.5% from 1 July 2014 through to 30 June 2021, increasing to 10% from July 2021, and eventually to 12% from July 2025.
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.
1. Superannuation Guarantee rate of 9.5%
Your employer must make superannuation contributions, at least quarterly, based on an annual entitlement of the equivalent of 9.5% of your ordinary time earnings for the 2016/2017 year (1 July 2016 to 30 June 2017). Likewise, your employer should have made these super contributions at the SG rate of 9.5% for the 2015/2016 financial year (1 July 2015 to 30 June 2016), and for the 2014/2015 financial year (1 July 2014 to 30 June 2015), and at the SG rate of 9.25% for the 2013/2014 financial year (1 July 2013 to 30 June 2014).
Before July 2013, the required percentage was 9% of ordinary earnings. Over the next 10 years, the SG percentage will gradually increase to 12% (by July 2025). For more information on the SG rate increase see SuperGuide article Superannuation Guarantee remains at 9.5% for 2016/2017 year, and for 2017/2018 year.
2. You must earn at least $450 a month
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?
3. Under-18s must earn $450 plus work at least 30 hours
If you’re younger 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: Casual work or starting first job.
4. Over-70s also entitled to SG
If you are aged 70 or over, you are now entitled to Superannuation Guarantee entitlements. Since the 2013/2014 financial year, eligible individuals aged 70 and over receive SG contributions from employers. For more information see SuperGuide article SG contributions now paid for over-70s (since July 2013).
5. SG paid quarterly, at a minimum
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 articles Super for beginners, part 18: My employer hasn’t paid my SG. What can I do? and Help! Where did my employer pay my Superannuation Guarantee contributions?
6. SG cap for high-income earners
If you’re a high income-earner, then your SG entitlement is subject to a cap, known as the maximum contributions base. For the 2016/2017 year, your employer is required to make SG contribution on 9.5% of your ordinary time earnings up to annual salary limit of $206,480 (which is measured on a quarterly basis, on $51,620 each quarter). For the 2015/2016 year, your employer was required to make SG contributions on 9.5% of your ordinary time earnings up to an annual salary limit of $203,240 (which was measured on a quarterly basis, on $50,810 each quarter). For more information see SuperGuide article Upper limit on SG contributions (for 2016/2017 year, and for previous years).
7. Is your pay quoted before/after super?
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 Superannuation Guarantee: Many Aussies miss out on SG increase.
8. Don’t let your salary sacrifice cut your SG
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 articles Superannuation Guarantee: Many Aussies miss out on SG increase and Salary sacrificing and super: 10 facts you should know.
9. Substantially self-employed but still receive SG
Even when you receive SG contributions, you may still be eligible to make tax-deductible super contributions. Check out SuperGuide article Tax-deductible super contributions: Meeting the 10% income test. Also, 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 ato.gov.au.
Note: From 1 July 2017, all individuals under the age of 75 will be able to claim tax deductions for personal super contributions, subject to the concessional contributions cap, and taking into account previously-made super contributions for a financial year. Such a measure will assist Australians who may be partly employed and partly self-employed, or assist individuals who work for employers who don’t accommodate salary sacrificing, or assist workers where an employer reduces a person’s SG entitlements if they salary sacrifice. For more information on this new super rule, see SuperGuide article Employees can make tax-deductible super contributions from July 2017.
10. SG contributions count towards concessional cap
Your employer’s SG contributions count towards your concessional (before tax) contributions cap. For more information, see SuperGuide article Super concessional (before-tax) contributions: 2016/2017 survival guide.