Are you on track with your business super obligations?

Learn the rules

Who do you need to pay super for?

All employees who earn $450 or more in a month (before tax), including those who are:

• working full-time, part-time or casual
• receiving a super pension or annuity
• aged under 18 and working 30 or more hours a week
• a temporary resident (eg a backpacker or someone on a working holiday)
• a family member
• a company director
• contractors (in some circumstances).

Here’s a tip: You may also need to pay super contributions for some contractors, even if they quote an Australian Business Number (ABN).

Who doesn’t need to be paid super?

You don’t need to pay super for:

• employees aged under 18 working less than 30 hours a week
• non-residents you pay for work they do overseas
• some foreign executives, depending on their visa or entry permit
• employees who are temporarily working in Australia and are covered by a bilateral super agreement. Make sure you keep a copy of each employee’s certificate of coverage
• employees who have an exemption certificate from the ATO which means you don’t have to pay their ‘Super Guarantee’ contributions (you will still need to pay any super contributions required under an award or enterprise agreement).

Check with the ATO

• View the rules at ato.gov.au/eligible4super
• Use the eligibility tool at ato.gov.au/SGet

Learn the rules

What is included in normal hours of work?

The amount your employees’ earn for their normal hours of work is called their ‘ordinary time earnings’ (or OTE) and includes things like:

• payments over and above the award rate
• commissions
• shift loadings
• annual leave loading
• allowances
• bonuses.

But not:

• overtime.

What is the current minimum rate?

You are generally required to pay super at 9.5%. This rate is set by the government and called the 'Super Guarantee'.

This rate is legislated to increase incrementally from 1 July 2021 to 10%, reaching 12% by 1 July 2025 (it is possible these dates may change).

When would you pay more than the minimum?

• If an employee’s award or employment agreement specifies a higher rate
• If you choose to pay a higher rate of super as an employee benefit
• When your employees choose to salary sacrifice to increase their super balance.

Is there a maximum?

Yes. You don’t have to pay the 9.5% Super Guarantee on your employees’ earnings above a set limit which is indexed so it increases each year. This is called the ‘maximum contribution base’.

Financial year	Income per quarter
2018-19	$54,030
2019-20	$55,270
For other years	Check with the ATO

Here’s a tip: This maximum only applies to Super Guarantee contributions. You’ll still need to pay any contributions required under an award.

How do you calculate it?

Here’s how you can work out the amount of super to pay:

Ordinary time earnings for the quarter ($) x super rate (%) = super payment

Check with the ATO

• Find out more at ato.gov.au/employersuper
• Use the Super Guarantee calculator at ato.gov.au/SGcalculator

Learn the rules

What are the quarterly deadlines?

Generally, your employees’ super funds must receive the contributions by the quarterly cut-off dates, or you may face penalties.

Quarter	Cut-off date
1 July - 30 September	28 October
1 October - 31 December	28 January
1 January - 31 March	28 April
1 April - 30 June	28 July

Here’s a tip: When a due date falls on a weekend or public holiday you can make the payment on the next working day.

Do you need to pay more regularly?

Some super funds, awards and contracts require you to pay super more frequently (eg monthly).

You can also choose to make payments more regularly as long as the total super owed is paid by the quarterly cut-off date.

When is it considered paid?

Contributions are considered paid when the super fund receives them. You may need to make your payment earlier than the cut-off date to allow time for the payment to reach the super fund.

What if you’re late?

You may have to lodge a ‘Super Guarantee Charge Statement’ and pay the ‘Super Guarantee Charge’. This charge is not tax deductible and includes the unpaid super, plus interest and an administration fee.

Check with the ATO

Find out more about late payments at ato.gov.au/latesuperpayments

Learn the rules

What is the right way?

You are required to send your employees’ contribution payments and data electronically in a standard format called ‘SuperStream’.

This format allows super information to be shared between employers, super providers and the ATO.

What are your options?

You have a number of options to make SuperStream compliant payments.

• Your default super fund – may have an online portal or super clearing house
• Sign up for a super clearing house – for example, the ATO’s Small Business Superannuation Clearing House
• Your payroll system – if it offers the ability to make super contributions payments
• Get help from your accountant or bookkeeper.

Here’s a tip: Ask your service provider if their service meets SuperStream requirements.

What about direct payments to a super fund?

If you’re paying contributions using electronic fund transfer or BPAY®:

• you must also send the linked super data electronically to be compliant with SuperStream (you’ll need a ‘messaging portal’ to do this)
• you must have a special agreement with each super fund to continue to pay contributions directly.

What about tax file numbers?

When your employee provides you with their tax file number (TFN), you are required to provide this to their super fund when you pay their next super contribution. If you receive it within 14 days before the payment is due, then you have 14 days to provide their TFN.

Check with the ATO

• Visit ato.gov.au/SuperStream to find out more about how to comply
• You can also view their ‘SuperStream Certified Product Register’ to find a super clearing house, payroll system or messaging portal (or check if yours is compliant).

Learn the rules

What are the requirements?

• You must select a default super fund (sometimes also called an ‘employer-nominated fund’)
• The fund must comply with specific requirements under super law
• The fund must be regulated by APRA and authorised to provide a MySuper product
• You should include the details of this fund in the ‘Standard Choice form’ you are required to give your employees.

Here’s a tip: Some awards and enterprise agreements may require you to pay super contributions into a specified fund. You should check if this applies for any of your employees.

What is MySuper?

MySuper products are designed to be simple, low-cost and easy to compare.

Check with the ATO

• Find out more at ato.gov.au/employersuper

Learn the rules

Do you need to provide a choice?

Yes, most employees have the right to choose their own super fund.

However some employees aren’t eligible to choose their own super fund – because some awards or enterprise bargaining agreements may require you to pay their super contributions to a particular super fund.

How do you provide a choice?

You should provide the ‘Standard choice form’ (or equivalent) within 28 days of a new employee starting work with you. You can get a copy of the form from your default super fund or at ato.gov.au/choiceform

Sometimes you may need to provide the standard choice form to an existing employee if:

• you are unable to pay super into their chosen fund
• they would like to change their chosen fund
• their fund becomes non-complying
• you change your default super fund.

When do you need to start paying to their chosen fund?

You must pay your employee’s super by the quarterly cut-off dates.

• If you have received their choice of super fund – you should pay their super to their chosen fund
• If you haven’t received their choice of fund – you should pay their super into your default super fund to meet the quarterly cut-off date. Once they advise you of their fund choice, you have two months to start paying contributions to their chosen fund.

What if you don't offer a choice?

If your employee is eligible to choose their own super fund, you may be penalised if:

• you don't offer your employee a choice of fund, or
• you don't pay their super to their chosen fund.

Check with the ATO

Learn more and download the standard choice form at ato.gov.au/choiceform

Learn the rules

What are the requirements?

You should keep records (written or electronic) to show:

• the super contributions you have paid for each employee
• how you calculated them
• that you offered a choice of super fund to any eligible employees (eg emails and their completed form)
• details of employees who aren’t eligible to choose their own super fund
• confirmation that your default super fund offers a MySuper product
• receipts (or similar) from your employees’ super funds to confirm the contributions received

These records should be in English and kept for at least 5 years.

How do you report super information to the ATO?

Your employees’ payroll and super information should be reported to the Australian Taxation Office (ATO) each time you pay your employees.

You need to submit the information online, using a specific format known as SBR (Standard Business Reporting).

Check with the ATO

To find out more about reporting to the ATO visit ato.gov.au/singletouchpayroll

Learn the rules

Is there a limit?

Generally, you may claim a 100% tax deduction for super contributions made on behalf of your employees.

The following are usually not tax deductible:

• contributions for an employee who is aged 75 and over that are paid after the quarterly due-date
• the Super Guarantee Charge (the extra charge payable when you make late contributions for any employee).

What if you were late paying your super contributions?

If you miss the quarterly cut-offs, you will likely still need to pay the Super Guarantee Charge, even if you make the payment later. However, you may have these options:

1. You can use the late payment offset to reduce the Super Guarantee Charge (this option is not tax deductible)
2. Carry the late payment forward as pre-payment of a future super contribution for the same employee (this pre-payment is tax-deductible in the year it’s paid).

Check with the ATO

Find out more at ato.gov.au/employersuper

Some things to consider

What is the default option?

Your default super fund must have a MySuper investment option – which is designed to be simple, low cost and easy to compare. If your employee doesn’t make an investment choice their super money will automatically be invested in this option.

The MySuper option will usually have one of the following investment approaches:

• A balanced/growth option where money is invested in a diversified mix of both growth and defensive assets
• A lifestage option that automatically adjusts your employees’ mix of assets with their age – moving from growth assets to more conservative assets as they get closer to retirement.

What investment choices are there?

Some super funds offer additional investment options so that your employees can choose how their money is invested. For example they could invest:

• in line with their goals and preference for risk – eg high growth, growth, balanced, conservative
• according to their ethics – such as environmental, social or governance standards
• in specific markets or investment types – like cash, bonds, international shares, property or infrastructure.

Check what’s available

• Ask your default super fund about the investment options available
• There is also a range of default super funds in the market you could compare with your existing default fund.

See what’s available with BT

• BT Super offers your employees a MySuper Lifestage option. Plus, if they want to be more hands on there are over 30 investment options to choose from, including access to a range of leading investment managers.
  

  Explore BT Super
  View investment options

Some things to consider

What insurance is included in super?

Under MySuper, your default super plan must offer death cover and total and permanent disablement (TPD) cover to your eligible employees.

• Generally employees are covered without the need to supply evidence of their health or other information. This is called ‘automatic cover’
• An employee can choose to opt-out of the included insurance
• Insurance cover through super may sometimes cost less than it would outside super. That’s because larger super funds generally negotiate a cheaper group rate for everyone

Are all of your employees covered?

Who is covered can vary between super funds. For example there may be different limits, rules or exclusions for some employees, such as:

• Casual employees and contractors
• Non-Australian residents
• Some occupation types.

What does each type of insurance cover?

Super funds generally offer three types of cover:

• Death cover (also called ‘life insurance’) pays money to your estate or beneficiaries when you die or if you become terminally ill
• Total and permanent disablement insurance pays a benefit if you become permanently disabled and are unable to work again
• Salary continuance insurance (sometimes called ‘income protection’) pays a benefit if you are unable to work due to a temporary illness or disability.

What are the recent changes?

There have been some recent changes to insurance in super:

• From 1 July 2019, super funds are required to cancel insurance cover for inactive accounts (those which have not received a contribution or rollover for a continuous period of 16 months)
• From 1 July 2019, inactive low-balance super accounts will be transferred to the ATO and, where possible, reunited with the member’s active super account
• From 1 April 2020, new members aged under 25 and members with low balance accounts will have to ‘opt in’ for insurance cover. However, employees in certain dangerous occupations are exempt and can be offered insurance cover on an ‘opt out’ basis.

Here’s a tip: Affected members can opt in to keep their insurance cover, if they wish.

Check what’s available

• Ask your default super fund about who is covered and what they’ll be covered for
• There is also a range of default super funds in the market you could compare with your existing default fund.

See what’s available with BT

• BT Super offers death and total and permanent disablement insurance with automatic cover generally provided without medical checks. Plus, if you have 5 or more employees you can choose to tailor the cover you offer including adding salary continuance insurance.
  

  Explore BT Super
  View the insurance guide

Some things to consider

What other benefits are available for my employees?

This tends to vary across super funds, but can include things like:

• discounts and deals – for everyday things like gyms, electronics, travel and entertainment (eg discounted movie tickets)
• financial education – like online tools, educational articles, newsletters, and online or face to face seminars
• expert support – access to financial advisers, super and insurance specialists
• wellbeing support – tools or programs to help your employees look after their financial, physical and mental health wellbeing.

What about the benefits for my business?

Again this can vary across super funds, but may include access to:

• a super clearing house – to make it simpler to pay all of your employees’ super contributions payments
• software or online tools – to help you manage your employees’ super.

Here’s a tip: Under super law, you as an employer cannot be offered any additional incentives that might influence your choice of default super fund. Some examples of incentives are things like special discounts, free tickets, gifts or hospitality.

Check what’s available

• Ask your default super fund about what other benefits are available to your employees and to help you manage their super
• There is also a range of default super funds in the market you could compare with your existing default fund.

See what’s available with BT

• BT Super offers discounts and deals, wellbeing support and a personalised Wealth Review report for your employees. You can also pay all your employees’ super contributions quickly at no cost using our super clearing house QuickSuper.
  

  Explore BT Super’s benefits
  QuickSuper for BT