Superannuation Guarantee (SG) is the official term for the compulsory super contributions that employers must make for their employees. The rate was previously 9.25%. As of the 1 July 2014, the new minimum SG contributions rate is 9.5%.
When does an employer have to pay SG?
Employers have to pay SG for full time and part time employees and some casual employees. Super is paid on:
• ordinary wages or salary
• annual leave & long service leave – provided the employee has not ceased employment prior to being paid these entitlements
• workers compensation (in certain circumstances)
When does an employer not have to pay SG?
Under the SG legislation, employers are not required to pay SG contributions for employees who are:
• earning less than $450 month
• under 18 years of age and working less than 30 hours per week
• taking parental leave and leave without pay
The SG rate is expected to increase to 12% by 2025, but will stay at 9.5% until 2021.
Author: Heather Cox
Email: heather@faj.com.au
