The Superannuation Guarantee (SG) is the compulsory amount that an employer must pay into the default or nominated superannuation fund in respect of an employee as part of their employment conditions.
The Superannuation Guarantee Charge (SGCC Superannuation) is a penalty payable by the employer if the mandatory Superannuation Guarantee (SG) payment is not made by the due date and/or not paid into the employee’s nominated fund.
The Superannuation Rate or SG Rate required to be paid is calculated as a percentage of the employee’s wage.
Detailed below are the past, present and planned future SG rates
| Financial Year | SGC Superannuation Rate (%) |
|---|---|
| 2012-13 | 9.00% |
| 2013-14 | 9.25% |
| 2014-15 | 9.50% |
| 2015-16 | 9.50% |
| 2016-17 | 9.50% |
| 2017-18 | 9.50% |
| 2018-19 | 9.50% |
| 2019-20 | 9.50% |
| 2020-21 | 9.50% |
| 2021-22 | 10.0% |
| 2022-23 | 10.5% |
| 2023-24 | 11.0% |
| 2024-25 | 11.5% |
| 2025 onwards | 12.0% |
Maximum SG Payments
The maximum earnings that an employer is required to make SG payments on is calculated on a quarterly basis. The quarterly income cap amount is
| Year | Quarterly Income | Annualised Amount |
|---|---|---|
| 2018-19 | $54 030 | $216 120 p.a. |
| 2017-18 | $52 760 | $211 040 p.a. |
| 2016-17 | $51 620 | $206 480 p.a. |
| 2015-16 | $50 810 | $203 240 p.a. |
| 2014-15 | $49 430 | $197 720 p.a. |
| 2013-14 | $48 040 | $192 160 p.a. |
For more information about the Maximum Contribution Base, please click here.
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This means that SG payments are not required to be made on the income that exceeds the above quarterly income amount.
For example, if a person was on an annual salary of $240,000 p.a., paid in equal amounts of $60,000 per quarter, the maximum SG that the employer would be required to make is $20,531.40 p.a. in the 2018-19 financial year. This is calculated as $54,030 x 9.5% x 4
SGC Calculator
Below is an interactive calculator that can be used to calculate what your SGC payments should be based on your wage and the financial year. Keep in mind that this calculator has limitations, as it does not take into account the Maximum SG Payments noted above and may not account for situations where earnings are irregular in each pay period.
Due Dates for SG Payments
| SGC Superannuation Quarter | Payment Due Before |
|---|---|
| 1 July – 30 Sept | 28 October |
| 1 Oct – 31 Dec | 28 January |
| 1 Jan – 31 Mar | 28 April |
| 1 April – 30 Jun | 28 July |
Tax On SGC Superannuation Contributions
SG Employer contributions are a Concessional Contribution. All Concessional Contributions incur Contributions Tax of 15%. However an additional 15% tax is payable on
Concessional Contributions for high income earners….. read more.
SG Exemptions
The following is a list of circumstances where SG payments are not required to be made by an employer
- Under age 18 – Part time employees working less than 31 hours/week
- An employee is paid less than $450 in one month
- Resident employees paid by non-resident employers for work completed outside of Australia (unless covered under agreement)
- Non-Resident employees paid for work completed outside of Australia
- Employees paid for work on a private or domestic basis for less than 31 hours/week, such as a gardener, housekeeper, nanny, etc.
Age Limit for SG Contributions
There is no longer an age limit for employees to be eligible for SG contributions.
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SG Contributions on Salary Sacrificed amounts
An employer is not required to make Superannuation Guarantee payments on amounts that are salary sacrificed to superannuation. This is because SG requirements are made in respect of an employees’ Ordinary Time Earnings (OTE). OTE’s are effectively reduced when a salary sacrifice arrangement is entered into by the amount that has been salary sacrificed.
In saying this, the employer is not prohibited from making SG contributions on the amount salary sacrificed.
However, there may be instances where, under some form of an agreement, the employer is required to make SG payments on the pre-salary sacrifice salary.
Contributions tax also needs to be considered.
Superannuation Guarantee Charge (SGC Superannuation)
SGC Superannuation payments are payable if the employer has not made the required SG payment into the nominated superannuation account by the cut-off date.
In such an instance:
- Interest is payable on the unpaid SG amount of 10% p.a. and an administration fee is also incurred. However, in these cases, the SG amount is calculated on the employee’s wages, as opposed to their OTE
- Other penalties may apply
- SGC payments are generally not a tax deductible expense to the employer (unlike SG contributions)
Choice of Fund
Certain employees are able to choose where their SG contributions are made using a Superannuation Choice Form. i.e. they are not restricted by the preferred or default fund of the employer.
However, many employees such as government employees, defined benefit members or employees under certain employment agreements may be unable to choose their own fund.
You should discuss this with the relevant personal at your place of employment or inquire with the Australian Securities and Investment Commission (ASIC) if you are still unsure.
If your payslip says that your SGC fund details are pending, then this is an indication that your employer is waiting for you to provide them with details of your choice of fund.
If you would like anything clarified or have any further questions about SGC Superannuation or any other topics, please do not hesitate to contact me by leaving a comment in the section below and I will endeavour to respond within 24 hours.
