The Superannuation Guarantee or SG is the minimum amount employers are required to pay into their eligible employees’ super accounts. Currently, SG is 10% of an eligible employee’s ordinary time earnings and must be paid at least four times a year by quarterly due dates into a complying super fund that the employee chooses, or, if they don’t choose, that the employer chooses. An employer generally needs to pay SG for an employee if they pay the employee $450 or more before tax in a calendar month. SG is governed by the Superannuation Guarantee (Administration) Act 1992, which outlines the administrative arrangements of the compulsory superannuation system, including employers’ liabilities, eligible super funds and penalties for employers who do not pay super for their employees.
The Superannuation Guarantee rate is the percentage of an eligible employee’s ordinary time earnings that an employer must pay into a complying super fund that the employee chooses, or, if they don’t choose, that the employer chooses. The rate is set by the government. It is currently 10% and set to increase to 10.5% in 2022-23, 11% in 2023-24, 11.5% in 2024-25 and 12% in 2025-26.
Superannuation Guarantee charge - For Employers
The Superannuation Guarantee charge or SGC is a penalty that an employer may incur for not paying SG for an eligible employee. The charge includes any shortfall in super that should have been paid, interest on that amount (currently 10%) and an administration fee ($20 per employee per quarter).