Superannuation
Superannuation, or ‘super’ is a savings fund for your employees to help them when they retire. Think of it as a little extra that you, as the employer, pay on top of their wages.
When you hire someone you also need to put aside an additional specified amount to pay into their super fund.
This is a legal requirement in Australia, known as the Superannuation Guarantee.
So, when you pay your staff, you’re covering their wages plus paying into their future retirement fund.
Australia does this to help people save for retirement and to reduce their need to rely solely on the government pension. It’s all about giving workers a bit more financial security when they finish working.
Quick facts:
- Superannuation Guarantee applies to all types of employees, including full-time, part-time and casual workers.
- In some cases, superannuation is also payable to some contractors.
- It may not be necessary to pay superannuation to employees under 18 years of age who work less than 30 hours per week but you should still check that.
- The minimum superannuation guarantee rate you must pay for each eligible employee from 1 July 2025 is 12 per cent of their ordinary time earnings (OTE), which is the amount they earn before tax.
- If you don't pay the required super guarantee amount by the quarterly due date, you must pay the Super Guarantee Charge (SGC).
What employers need to do:
- Offer employees a choice of superannuation funds. A superannuation fund is a legal entity that holds and invests a person’s retirement savings.
- Pay superannuation contributions four times per year, by the quarterly due dates.
- Pay superannuation electronically – contributions cannot be paid in cash.
- Keep records of all superannuation contributions.
- Use SuperStream to pay employee superannuation.
If you don’t meet your superannuation obligations, you may face the Superannuation Guarantee Charge (SGC), which includes unpaid superannuation, interest and administration fees.
Additional penalties and audits may also apply. To stay compliant, pay on time, use SuperStream, and keep accurate records.
Do I need to pay myself superannuation?
As a sole trader or partner in a partnership, you can choose whether you pay superannuation to yourself.
You aren’t required to make superannuation contributions for yourself, but you may choose to, as a way to save for your own retirement.
For more information on superannuation, contact the Australian Tax Office or contact a licensed financial advisor.
Use the Australian Government’s Moneysmart website to find a qualified financial advisor in your area.
What is SuperStream?
SuperStream is an Australian Government initiative that simplifies the way employers pay superannuation contributions to their employees' superannuation funds.
It reduces errors and saves time by speeding up the processing of superannuation payments. SuperStream links with payroll systems such as MYOB and Xero.