23/03/2020Factsheets

What is the super guarantee? Do I have to pay my employees superannuation?

The superannuation guarantee is the contribution employer is required to make into a super fund on an employee’s behalf. Read more...

On this page:

  • What is the super guarantee?
  • Do I have to pay my employees superannuation?
  • What is the present-day super guarantee percentage?
  • Can I contribute funds into my superannuation account while I’m overseas?


What is the super guarantee?

The world of superannuation is riddled with jargon, one of the most commonly searched for terms being ‘superannuation guarantee’. In layman’s terms, the superannuation guarantee is the contribution employer is required to make into a super fund on an employee’s behalf. In most cases, you will be eligible for superannuation guarantee if you are over 18 and earn more than $450 per month (before tax).

Do I have to pay my employees superannuation?

According to the Australian Taxation Office (ATO), the super guarantee requires employers to provide sufficient super support for their employees. Employers are subsequently obliged to contribute a minimum percentage of each eligible employee’s ordinary time earnings to a complying super fund or retirement savings account (RSA). Employers who do not pay the correct amount of super to their employees may have to pay a superannuation charge (not tax deductible) which is made up of the shortfall amount, interest on that amount (currently 10%) and an administration fee. Further action can be taken by the ATO if an employer fails to pay the charge. Failure to pay can result in a fine of up to $10,500 or 12 months imprisonment.

What is the present-day super guarantee percentage?

The general super guarantee percentage that applies to us during this time frame (1 July 2020 – 30 June 2021) is 9.50% of the employee’s ordinary time earnings. Future super guarantee percentages can be found here. The maximum super contribution base can be found here.

Can I contribute funds into my superannuation account while I’m overseas?

Yes, except for self-managed super funds (SMSFs).
Apart from self-managed superannuation funds, other types of Australian Superannuation funds are likely to still allow for personal contributions whilst overseas. FairVine Super allows this through its personal contribution feature – TopUps.

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Disclaimer

All information provided in the magazine is sourced from independent writers & may contain general advice that is not endorsed by the FairVine Super Plan.