• Christopher Hall

What is the Superannuation Guarantee?


What is the Superannuation Guarantee?

The Superannuation Guarantee (SG) is a compulsory system of superannuation support for employees, paid for by employers. In more general terms; SG is a percentage of an employee’s income that must be paid into a specialised account set up with the sole purpose of providing for that employee’s retirement purposes.

SG was introduced in 1992 by the Keating Labour Government and while contentious at the time, it now generally has widespread backing.

SG is also an Australian legislation. While superannuation is not unique to Australia, the rules of SG are specific to Australia, from Australian legislation. For more information on superannuation within Australia, see the government website here.

Do I have to pay / get paid SG?

Generally, employees are eligible to receive superannuation from their employer if they earn $450 or more a month from that employer.

How much of my income is SG?

SG is currently 9.5% of an employee’s ordinary time earnings, although some employers will pay more.

For example, if you’re earning $50,000pa, then your employer should pay an additional $4,750 into your superannuation fund each year – at a minimum.

The employers which pay a percentage higher than the minimum of 9.5% are often industries with strong union representation like education, for example university staff.

Is there a maximum amount of superannuation that I can receive / pay?

Yes, although it depends on circumstance.

In general, $25,000 is the annual gross SG contribution limit. This is a simplification of the SG framework however, as there are a few different ways of adding to your superannuation. Each method has different levels of taxation and other matters to consider, all of which can change each year depending on federal budget announcements.

Here is a government webpage to summarise the ‘contribution caps’, otherwise speak with your superannuation fund or an industry expert to find out more.

How often should I receive my super payments?

Your employer must make at least quarterly payments into your nominated superannuation fund. If your employer doesn’t make quarterly payments, they can be liable for a fine called a superannuation guarantee charge (SGC).

Note that your superannuation payment may appear on your weekly payslip but only be paid into your Super account quarterly.

What if I haven’t been paid my SG amounts?

If you suspect that you haven’t received your SG payments, check your superannuation statement or call your superannuation fund to check.

In the case that you haven’t been paid your SG amounts into your superannuation, you can make a complaint to the ATO using the steps here.

Before you make a complaint, follow the Fair Work Ombudsman’s guide here.

When am I not eligible for SG / Exceptions:

Your employer will not have to pay you superannuation when you:

  • Earn less than $450 a month

  • Are under 18 years old and work less than 30 hours a week

  • Are a non-resident employee being paid for work done outside Australia

  • Are an Australian resident employee paid by non-resident employers for work done outside Australia

  • Are a worker under a particular working visa or entry permit which doesn’t qualify for superannuation

  • Do paid work of a domestic or private nature (part-time nanny or domestic house-keeper)

  • Are a paid (non-volunteer) member of the defence force

  • Are an Australian working for non-resident employers, working outside Australia.

To see how much Superannuation you need to retire, click here.


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