The SGC Cap generally refers to the maximum superannuation contribution base.

The SGC cap threshold for the 2017 / 2018 year is based on the quarterly earnings of an employee.

An employer is only required to make mandatory superannuation guarantee contributions (SGC) up to a certain level.

An employer is permitted to make contributions above the SGC cap, but not obligated.

SGC payments are classified as Low Tax Super Contributions and count towards the annual Concessional Contributions cap.

All SGC payments incur contributions tax of 15%. Contributions tax is effectively increased to 30% for high-income earners.

There is no longer an age restriction on SGC payments made on behalf on an employee.

READ: ‘Age Limits For Superannuation Contributions

SGC Cap 2017 / 2018

The SGC Cap for recipients of mandatory employer superannuation guarantee (SG) contributions for the 2017 / 2018 year, including the history of the maximum contribution threshold, is as follows:

Income Year Income Earned Per Quarter
2017-18 $52 760
2016-17 $51 620
2015-16 $50 810
2014-15 $49 430
2013-14 $48 040
2012-13 $45 750
2011-12 $43 820
2010-11 $42 220
2009-10 $40 170
2008-09 $38 180
2007-08 $36 470
2006-07 $35 240
2005-06 $33 720
2004-05 $32 180
2003-04 $30 560
2002-03 $29 220
2001-02 $27 510
2000-01 $26 300
1999-00 $25 240
1998-99 $24 480
1997-98 $23 630
1996-97 $22 590
1995-96 $21 720
1994-95 $20 780
1993-94 $20 160
1992-93 $20 000

The SGC Cap determines how much mandatory employer contributions must be made on a quarterly basis.

SGC Cap 2017 / 2018 Example

If an employee earned $40,000 during a quarter in the 2017/2018 financial year, an employer would be legally obligated to pay SGC payments of $3,800 for this period (9.5% SGC rate x $40,000).

However, if an employee earned $60,000 in a quarter in the 2017/2018 financial year, an employer would only be legally obligated to pay SGC payments of $5,012 for this period (9.5% SGC rate x $52,760). This is because $52,760 is the maximum contribution base and creates the SGC cap.

Be aware, the SGC cap and maximum contribution base may be subject to individual employment agreements or arrangements.

SGC Cap 2017 / 2018 Quareterly Periods

The quarterly periods relating to the SGC Cap for the 2017/2018 financial year are as follows:

Period Quarter Due Date for SG Payments
1 1 July – 30 September 28 October
2 1 October – 31 December 28 January
3 1 January – 31 March 28 April
4 1 April – 30 June 28 July

SGC Lower Threshold

The lower threshold of $450 for SGC purposes relates to the minimum earnings that an employee must earn over a one month period to be entitled to mandatory employer superannuation contributions.

Generally, an employer must make super contributions to employees if they are over age 18 and earn more than $450 (before tax) in a calendar month.

Super-Cap-2017-2018

Super-Cap-2017-2018

If an employee is under age 18, an employer must make super contributions if the employee earns more than $450 (before tax) in a calendar month and works more than 30 hours in a week.

SGC Rate 2017 / 2018

The superannuation guarantee levy rate is as follows. This superannuation percentage rate is applied against an employees’ income to determine the compulsory contributions that must be made into their account by their employer (subject to the SGC cap).

Income Year Superannuation Guarantee (SG) Rate
1 July 2003 – 30 June 2013 9%
1 July 2013 – 30 June 2014 9.25%
1 July 2014 – 30 June 2015 9.5%
1 July 2015 – 30 June 2016 9.5%
1 July 2016 – 30 June 2017 9.5%
1 July 2017 – 30 June 2018 9.5%
1 July 2018 – 30 June 2019 9.5%
1 July 2019 – 30 June 2020 9.5%
1 July 2020 – 30 June 2021 9.5%
1 July 2021 – 30 June 2022 10.0%
1 July 2022 – 30 June 2023 10.5%
1 July 2023 – 30 June 2024 11.0%
1 July 2024 – 30 June 2025 11.5%
1 July 2025 – 30 June 2026 12.0%

The SGC payment rate is expected to increase from the current 9.5% up to 12% by 2025, as shown in the table above.

SGC Cap Self Employed

Superannuation guarantee payments are only required to be made by employers in respect of their employees.

Self employed persons are under no obligation to make super contributions into their account. However, self-employed super contributions are permitted and a tax deduction may be able to be claimed.

An employee is required to receive super contributions from their employer, even if the person is an employee of their own business, subject to the minimum monthly income threshold.

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Chris Strano

Chris Strano is a specialist independent superannuation author for SuperGuy.com.au - one of Australia's leading superannuation information resources.

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