This article addresses the maximum contribution base and the SGC quarterly cap for employer contributions made into a superannuation account in respect of an employee for the 2016 financial year.
Superannuation Guarantee payments are compulsory. The current rate for employer SG contributions is 9.5% p.a. This percentage of salary is on the increase. It began as 9.0% and will steadily increase to 12% by 1 July 2026. Click here for a table detailing the superannuation percentage for each year.
It is important to note that SGC payments are capped for high income earners. While this will not affect most people, employers are only required by law to pay SGC up to the maximum contribution base, as outlined below:
A longer history of the maximum contribution base can be found here.
As SGC is paid on a quarterly basis, the amounts noted above are the maximum that the employer needs to pay in any given quarter. For example, if a person earns a salary of $250,000 per annum (p.a.) paid equally throughout the year, they would have a quarterly salary of $62,500. However, because of the SGC quarterly cap, the maximum super guarantee contribution that the employer would need to make for the quarter (2016 year) would be $4,826.95 ($50,810 x 9.5%). As you can see, this is not calculated on the actual quarterly wage that the employee receives.
There is also contributions tax to consider.
Click here to see when SG payments need to be made, how often and any deadlines.
Super Tips For 2019
Boost your superannuation balance. 3 super strategies for a comfortable retirement.
If you would like anything clarified or have any further questions about Maximum Super Guarantee Contributions or the SGC Quarterly Cap or any other topics, please do not hesitate to leave a comment in the section below and I will endeavour to respond within 24 hours.