Understanding responsibilities

How much super do I need to pay?

When paying super to your employees, as a general rule you use OTE (Ordinary Time Earnings) to calculate the minimum superannuation contributions required. The current rate of superannuation is 11% of OTE This is increasing to 11.5% on 1 July 2024. To see what is included in OTE click here.

Which employees do I have to pay super for?

You must pay Superannuation Guarantee (SG) contributions on top of the employees’ wages for all eligible employees regardless of how much they are paid.

However, if your employee is under 18 or is a private or domestic worker, such as a nanny, they must work more than 30 hours per week to qualify.

You have to pay super for some contractors, even if they quote an Australian Business Number (ABN).

Remember you must pay super no matter whether the employee is:

• Full time, part time or casual
• Receives a super, income account or annuity payment while still working - including those who qualify for transition to retirement
• Is a temporary resident - when they leave Australia, they can claim the payments you made through a ‘departing Australia superannuation payment’

For more information about contractors click here.

When must I pay my super?

Super Guarantee (SG) payments must be made to complying funds by the quarterly due dates.

Employers who pay superannuation for employees under an industrial agreement (e.g. Enterprise Bargaining Agreement/EBA), may be required to remit contributions monthly. The SG legislation is a minimum requirement and industrial agreements override this, so you must adhere to the terms set out in any applicable industrial agreements.

What happens if you pay your super later than these dates?

If you don’t meet your obligations, you may be liable to pay the Super Guarantee Charge (SGC) as well as any shortfall in contributions to the ATO. For further details download our Super Made Simple for Employers fact sheet.

How to make super payments for your employees

BUSSQ makes it easy to pay your superannuation contributions.

You can pay super for all of your employees in one place through our online system EmployerAccess. No matter how many people you employ the system is easy to use.

You can use it to make payments to BUSSQ only or to all of your employees’ super funds through the clearing house SCH online.

The online system lets you:

• Lodge your super contributions to multiple funds through the clearing house SCH online
• Update your business contact details
• Keep your employees details up to date
• Access reporting for past payments

All employers can use our online system EmployerAccess. If you need assistance logging in to your BUSSQ employer account online, please give us a call on 1800 692 877.

Choice of fund

BUSSQ is a complying super fund that can look after you and your employees.

Most employees are entitled to choose the fund that their employer pays their super contributions into. When an employee starts work, if they are entitled to choose their own fund, you must provide them with a Choice of fund form within 28 days from their start date (and keep this on record for five years).

If your employees don’t choose a fund or provide the necessary information, you will need to request their stapled fund from the ATO and pay their super into that account.

You must have an employer nominated default fund to create accounts for employees who don’t choose a fund or don’t have an existing stapled super fund (e.g. an employee starting their first job). Having a default fund will mean you can meet your obligations and not be liable for penalties.

It’s important to note that employees working under an EBA made before 1 January 2021 may not have choice of fund apart from the funds nominated in the EBA agreement. From 1 November 2021, for new employees covered by an EBA made before 1 January 2021, you must request their stapled fund from the ATO and if they don’t have a stapled fund, then you may pay to the fund specified in the EBA agreement.

Further information on employer default fund arrangements can be found on the ATO website.

Paying super for contractors

If you employ and pay contractors mainly for their labour, then they are employees for superannuation guarantee (SG) purposes, and you may need to pay super to a fund for them. This is the case even if the contractor has an Australian Business Number (ABN).

You will need to pay super for contractors if you pay them:

• Under a verbal or written contract that is mainly for their labour (more than half the dollar value of the contract is for their labour)
• For their personal labour and skills (payment isn’t dependent on achieving a specified result)
• To perform the contract work (work cannot be delegated to someone else).

If you enter into a contract with a company, trust or partnership you do not have to pay super for the person they employ to do the work.

Super must be paid to a complying super fund – chosen by the worker. It must not be paid directly to the worker, or to their bank account.

Remember

• Having an ABN (Australian Business Number) does not automatically exclude a contractor from being an ‘employee’ and therefore does not automatically release you from your superannuation obligations to that contactor.
• A person working for an hourly rate (labour only hourly rate contractor) is still an employee for superannuation purposes.
• Every contract is different. BUSSQ is not an authority on the relationship/contracts you have with your employees/contractors. We can give you some basic guidance, however you may need to contact the ATO.
• An employer cannot contract out of their superannuation guarantee obligations (i.e. they cannot agree to pay a higher rate of pay so the contractor can pay their own super).

Still unsure if you need to pay super for your contractor?
To find out more about paying super for contractors download our fact sheet which includes case study examples of when a contractor is and isn’t an employee for SG purposes.