When To Pay Super
Up until 1 July 2022, if you pay an employee $450 or more (before tax) in salary or wages in a calendar month, you will generally also need to pay super guarantee for them. Salary or wages includes any overtime.
As an employer, you use:
ordinary time earnings (OTE) to work out the minimum super guarantee contribution for your employees – OTE is the amount you pay employees for their ordinary hours of work
salary and wages to work out the super guarantee thresholds and calculation of shortfalls such as the super guarantee charge.
From 1 July 2022, you’ll generally need to pay super guarantee contributions to an employee’s super fund regardless of how much they are paid. Employees will still need to satisfy other eligibility requirements, as these have not changed. This includes other workers who are eligible for super, including contractors. For more information, see removing the $450 per month threshold for super guarantee eligibility.
An employee’s eligibility for super guarantee is determined when they are paid salary and wages, not when the income is earned. This means if you pay an eligible employee on or after 1 July 2022, you will need to pay their super regardless of how much they have earned, even if some of the pay period it relates to is before 1 July 2022.
Eligibility
Generally, all employees are eligible for super. It doesn’t matter if the employee is:
- full-time, part-time or casual
- receiving a super pension or annuity while working (this includes employees on transition to retirement)
- a temporary resident, such as a backpacker
- a company director
- a family member working in your business.
- There are additional eligibility rules for some employees. These are explained below.
You can use the eligibility tool to work out if you have to pay super for a worker.
Employees Aged Under 18
You must pay super for an employee aged under 18 years if:
- they work for you more than 30 hours in any week
- you pay them $450 or more (before tax) in salary or wages in a calendar month prior to 1 July 2022.
- From 1 July 2022, you must pay super on payments you make to an employee aged under 18 years if they work for you more than 30 hours in a week, regardless of how much you pay them.
Domestic Or Private Workers
Domestic or private workers do work:
- relating personally to you (not to a business of yours)
- relating to your home, household affairs or family – such as a nanny, housekeeper or carer.
You must pay super on payment for work of a domestic or private nature if:
- they work for you more than 30 hours in a week and
- you pay them $450 or more (before tax) in salary or wages in a calendar month prior to 1 July 2022.
- From 1 July 2022, you must pay super on payments you make to domestic or private workers if they work for you more than 30 hours in a week, regardless of how much you pay them.
You may also have to pay super for domestic workers or carers if the following both apply:
- you have a National Disability Insurance Scheme (NDIS) plan that you manage yourself
- you use your funds to hire a carer or other domestic worker.
Contractors
You must pay super for contractors if:
- you pay them mainly for their labour
- you pay them $450 or more (before tax) in a calendar month prior to 1 July 2022.
- From 1 July 2022, if you pay a contractor mainly for their labour, you will need to pay super regardless of how much you pay them.
This is the case even if they quote an Australian business number (ABN).
International Workers
Your worker is eligible for super even if they are a temporary resident, such as a backpacker or a working holiday maker.
If you send an Australian employee to work temporarily in another country, you must continue to pay super contributions for them in Australia.
For employees working overseas, you can apply for a certificate of coverage so you don’t have to pay super in the other country as well.
However, you do not have to pay super for:
non-resident employees who work outside Australia
some foreign executives who hold certain visas or entry permits (phone us on 13 10 20 for information)
employees temporarily working in Australia who are covered by a bilateral super agreement – you must keep a copy of the employee’s certificate of coverage to prove the exemption.
If you’re a non-resident employer, you do not have to pay super for resident employees for work they do outside Australia.
Self-Employed
If you’re self-employed as a sole trader or in a partnership, you do not have to pay super guarantee for yourself.
Armed Forces Reservists
You do not have to pay super for members of the army, naval or air force reserve for work carried out in that role.
High Income Earners Who Opt Out Of Super
You do not have to pay super for high-income earners working for multiple employers who ask you not to pay super guarantee to them.
You must have an SG employer shortfall exemption certificate for the employee. We will send you the certificate after the employee has applied to us to opt out.
