How to Pay Super Contributions as an Employer

As an employer in Australia, you are responsible for understanding superannuation contributions. Superannuation, or ‘super,’ is a system where employers contribute a percentage of an employee’s earnings into a super fund to help them save for retirement. This obligation is a key part of the Australian employment framework, ensuring workers build retirement savings. Meeting these requirements involves understanding regulations, timely payments, and accurate record-keeping.

Determining Employee Eligibility and Contributions

Employers must identify eligible employees for Superannuation Guarantee (SG) contributions and calculate the correct amounts. Most employees are eligible for SG contributions, regardless of their employment status. Since July 1, 2022, no earnings threshold applies, meaning employers pay super for eligible employees regardless of how much they earn.

Employees aged 18 or older are eligible regardless of hours worked. Those under 18 must work more than 30 hours in a week to qualify. Temporary residents and company directors are also eligible.

Super contributions are based on an employee’s Ordinary Time Earnings (OTE). OTE includes regular payments for ordinary hours worked, such as salary, wages, commissions, shift loadings, and most non-reimbursement allowances. Payments for paid leave, including annual leave and public holidays, are also part of OTE. Overtime, specific expense reimbursements, and some termination payments are excluded from OTE.

The Superannuation Guarantee (SG) rate, the minimum percentage employers must contribute, increased to 12% of an employee’s OTE from July 1, 2025. To calculate the minimum contribution, employers multiply the employee’s OTE by the current SG rate. There is a maximum contribution base, meaning employers do not need to pay SG on earnings above a certain quarterly limit.

Choosing a Super Fund for Employees

Employers must ensure superannuation contributions go to the correct fund for each employee. Employees have the right to choose their own super fund, known as ‘choice of fund.’ Employers must provide eligible new employees with a Superannuation Standard Choice Form within 28 days of their start date, allowing them to nominate their preferred fund.

If a new employee does not choose a fund, employers must check for an existing ‘stapled super fund.’ A stapled fund is an existing superannuation account linked to an individual, following them as they change jobs. Employers can identify a stapled fund by logging into ATO online services and using the ‘stapled super fund request service,’ which provides a result after lodging a Single Touch Payroll event or Tax File Number declaration.

If an employee does not choose a fund and no stapled fund is identified by the ATO, employers must pay contributions into their nominated ‘default super fund.’ A default fund is an employer-selected superannuation product that meets specific criteria and regulatory requirements. Employers must not influence an employee’s choice of fund, but rather facilitate it or direct contributions based on stapled fund rules or a compliant default fund.

Preparing for Superannuation Payments

Employers must collect and maintain accurate employee data for superannuation payments. This includes the employee’s name, address, date of birth, Tax File Number (TFN), and chosen super fund details. For the super fund, employers need its Australian Business Number (ABN), Unique Superannuation Identifier (USI) or product name, and the employee’s account number. Providing the employee’s TFN helps the fund correctly attribute contributions and avoids extra tax for the employee.

Setting up payroll systems or software to track and calculate superannuation entitlements is important. Modern payroll software integrates superannuation calculations, helping determine the correct OTE and apply the current SG rate. This automation minimizes manual errors and streamlines preparation. The system should generate payment information compatible with SuperStream, the electronic standard for super payments.

Employers must be aware of superannuation payment due dates. Contributions are generally due quarterly: October 28 for July-September, January 28 for October-December, April 28 for January-March, and July 28 for April-June. If a due date falls on a weekend or public holiday, payments can be made by the next business day.

Making Superannuation Contributions

Remitting superannuation contributions must adhere to specific electronic standards. The SuperStream standard is mandatory for all employers. SuperStream requires employers to send superannuation data and payments electronically in a standardized format.

Employers can use several methods for SuperStream compliant payments. Many businesses use payroll software that integrates directly with SuperStream. This software calculates contributions, generates data files, and facilitates electronic payments directly to super funds.

Another common method is using a superannuation clearing house. The ATO provides a free Small Business Superannuation Clearing House (SBSCH) for eligible businesses. Employers make a single payment to the SBSCH, which then distributes funds to individual employees’ super funds with associated data. Commercial clearing houses are also available.

Some employers may make payments directly to the super fund via SuperStream. This involves uploading a data file and initiating payment through the fund’s online portal or a direct electronic transfer system. The super contribution is ‘paid’ once received by the employee’s super fund, not when sent to a clearing house or initiated. Allow sufficient processing time to ensure payments are received by quarterly due dates.

Record Keeping and Reporting Obligations

Maintaining accurate records of all superannuation contributions is a legal requirement. Records should include the amount paid, date of payment, super fund, and specific employee details. Proper record keeping demonstrates compliance with superannuation obligations and helps reconcile payments with payroll records.

Superannuation contributions are reported through Single Touch Payroll (STP). STP requires employers to report salaries, wages, Pay As You Go (PAYG) withholding, and superannuation information to the ATO each time they pay employees. This real-time reporting allows employees to view their year-to-date superannuation information via myGov. Accurate and timely STP reporting ensures the ATO has current information for compliance.

Employers must issue payslips that clearly show superannuation contributions. This provides employees with a direct record of their entitlements and contributions. The payslip should specify the amount of super contributed for that pay period.