Servicing Greater Sydney, Parramatta

Tax Facts - Superannuation Guarantee

In addition to employees' salaries and wages, employers are required to pay superannuation contributions on behalf of all eligible employees. This compulsory contribution is called the superannuation guarantee. The definition of employee for this purpose includes certain contractors. The minimum contribution from 1 July 2014 is 9.5% of each eligible employee's earnings base (usually their ordinary time earnings) and must be paid within 28 days after the end of each calendar quarter. Employers must also provide employees with a choice of superannuation fund.

The minimum contribution rate will remain at 9.5% until 30 June 2021. After that date, the rate will increase by 0.5% each financial year until it reaches 12% from 1 July 2022.

Employers are generally required to pay superannuation contributions for employees if they are:

  • Over the age of 18 (no upper age limit applies)
  • Paid $450 or more (before tax) in a calendar month.

If an employer fails to make the minimum contributions for a quarter by the due date, the employer is liable for the Superannuation Guarantee Charge (SGC). The SGC comprises the unpaid contributions calculated on a higher earnings base, plus an interest charge (which is credited to the employee's superannuation account) and an administration fee. The employer cannot claim an income tax deduction for the SGC.

The Australian Taxation Office (ATO) provides the following tools to help you understand and meet your obligations:

  • Our firm is built on being attentive to and extensively knowledgeable about our clients so we can work with them to help them to both achieve their goals and protect them from risk. We are forward looking in our advice and always aim to be practical and right.
    - Martin Roughley, Managing Director
  • In business, there is so much going on and you don’t always have all the answers. That’s when you need to know who to call. Our clients call us.
    - Shaun Madders, Director
  • Going beyond the compliance and routine is what we do. By maintaining open and frank communication we are able to provide valuable insights and assist in driving the changes required to help our clients achieve their goals.
    - Fergus Roughley, Director