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Superannuation

Superannuation (or “super”) is an amount of money paid by your employer into a fund to provide for your retirement. Employers must pay a proportion of your wage into one of these funds. This is known as the Superannuation Guarantee.

Note – This factsheet is currently under review given recent announcements in the Federal Budget 2021.

Superannuation (or “super”) is an amount of money paid by your employer into a fund to provide for your retirement. Employers must pay a proportion of your wage into one of these funds. This is known as the Superannuation Guarantee. Super is paid on top of your wage; unlike tax, it is not deducted from your wage (however, be aware that sometimes salaries are advertised as inclusive of super which means the base wage is lower). Some employees may make additional voluntary super contributions themselves. Such contributions do not count towards your employer’s obligation towards you.

Who should receive super?

Most employees are entitled to superannuation contributions from their employer, including permanent or casual full-time and part-time workers. An employee, for the purposes of the Superannuation Guarantee, is a person who receives payment of wages in return for the work that they do.

Some contractors who are paid mainly for their labour may also be employees for superannuation purposes. Even if you quote an Australian Business Number (ABN), you may be considered to be an employee for superannuation purposes. If you are unsure about your entitlements you should contact the Australian Taxation Office (ATO) for clarification.

Some employees are not entitled to superannuation. This group includes those who:

  • are paid less than $450 (before tax) by their employer within any calendar month
  • are under 18 years of age and work 30 hours or less per week
  • do domestic work for 30 hours or less per week.

If you are employed as a part-time or as a casual worker and your total monthly wage with a particular employer changes from one month to the next – above and below the $450 (before tax) level – then you must have superannuation payments made on your behalf by your employer for those months that you earned more than $450.

How much money must my employer contribute?

The minimum amount of money that must be paid by your employer into a superannuation fund is currently 9.5% of your earnings base.

Your earnings base usually includes your wage total (before tax) for your normal hours of work as well as any annual leave payments for leave actually taken. Some other payments such as pay instead of notice of termination, allowances, commission earned and performance based bonuses (unless the bonus is exclusively for working overtime) should also count as part of your earnings base. Your earnings base may be stated in a modern award, enterprise agreement or employment contract. If it is not, then your earnings base will be based on your ordinary time earnings (OTE) which is the amount you earn for your ordinary hours of work.

Payments that do not normally form part of your OTE include:

  • overtime payments;
  • weekly WorkCover payments where no work is performed; and
  • cash payments for annual leave that you have not taken.

Employers are required to make contributions to your fund for each quarter by specified dates.

Be aware that 9.5% is the minimum employer contribution rate. Some employees may receive a higher employer contribution rate if it is stated in their employment contract or an applicable enterprise agreement etc.

More information can be found in the attached fact sheet, which we recommend you download.

For further support

Call our Telephone Information Service on Melbourne Metro (03) 9662 1933 or Regional Victoria, Queensland and Tasmania on 1800 331 617.

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