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Contact Details

Smith Thornton Accountants
234 Stirling Tce
Albany, WA 6330
Australia

P 08 9842 5155
F 08 9842 5510
mail@smiththornton.com.au

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Tax Facts - Superannuation Guarantee

In addition to employees' salaries and wages, employers are required to pay superannuation contributions on behalf of all eligible employees. This compulsory contribution is called the superannuation guarantee. The definition of employee for this purpose includes certain contractors. The minimum contribution from 1 July 2014 is 9.5% of each eligible employee's earnings base (usually their ordinary time earnings) and must be paid within 28 days after the end of each calendar quarter. Employers must also provide employees with a choice of superannuation fund.

The minimum contribution rate will remain at 9.5% until 30 June 2021. After that date, the rate will increase by 0.5% each financial year until it reaches 12% from 1 July 2022.

Employers are generally required to pay superannuation contributions for employees if they are:

  • Over the age of 18 (no upper age limit applies)
  • Paid $450 or more (before tax) in a calendar month.

If an employer fails to make the minimum contributions for a quarter by the due date, the employer is liable for the Superannuation Guarantee Charge (SGC). The SGC comprises the unpaid contributions calculated on a higher earnings base, plus an interest charge (which is credited to the employee's superannuation account) and an administration fee. The employer cannot claim an income tax deduction for the SGC.

The Australian Taxation Office (ATO) provides the following tools to help you understand and meet your obligations:

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General advice warning: Any recommendation or advice contained on this website is not intended to be financial or product advice and is for general information only. Readers should only act on information after having received professional advice appropriate to their personal circumstances. The information provided on this website is for use of a general nature only as is not intended to be relied upon as, nor to be a substituent for, specific professional advice. No responsibility for loss occasioned to any persons acting on or refraining from action as a result of any material in this publication can be accepted.