How to Pay Super Contributions for Your Business

Superannuation, often called “super,” is a mandatory retirement savings system in Australia. It requires employers to contribute a portion of their employees’ earnings into a superannuation fund. The system’s primary purpose is to help individuals accumulate savings for retirement, reducing reliance on the age pension.

Understanding Your Superannuation Obligations

Employers have a legal obligation to pay superannuation guarantee contributions for most employees aged 18 or older, including full-time, part-time, and casual workers. For employees under 18, payments are required if they work more than 30 hours per week.

The Superannuation Guarantee (SG) rate is the minimum percentage of an employee’s earnings employers must contribute. From July 1, 2025, the SG rate is 12% of an employee’s ordinary time earnings (OTE). OTE includes regular earnings, commissions, shift loadings, bonuses, and paid leave, but generally excludes overtime payments.

Employers must make superannuation payments at least quarterly. The quarterly payment due dates are October 28 (for July 1 to September 30), January 28 (for October 1 to December 31), April 28 (for January 1 to March 31), and July 28 (for April 1 to June 30). If a due date falls on a weekend or public holiday, payments are due on the next business day.

Superannuation obligations can also extend to certain independent contractors. If a contractor is paid mainly for their labor, must perform the work personally, and cannot delegate tasks, they may be considered an employee for superannuation purposes, even if they have an Australian Business Number (ABN). In such cases, superannuation is calculated on the labor component of the contract.

Preparing Employee and Fund Information

Employers must gather specific information for each employee and their chosen superannuation fund. This includes the employee’s full name, date of birth, address, and Tax File Number (TFN). Providing the TFN is required by law for matching contributions to the correct account.

Employees have the right to choose their own superannuation fund. Employers must provide eligible employees with a ‘Standard Choice Form’ within 28 days of their start date, allowing them to nominate their preferred fund.

If an employee does not choose a fund, the employer must determine if the employee has a ‘stapled super fund.’ A stapled fund is an existing superannuation account linked to the employee from a previous job. Employers may need to request details of a stapled fund from the Australian Taxation Office (ATO). If no stapled fund exists, the employer must pay contributions into their nominated default fund, typically a MySuper product.

For the chosen superannuation fund, employers need the Unique Superannuation Identifier (USI), which identifies the specific superannuation product. Other necessary fund details include the fund’s Australian Business Number (ABN) and its Electronic Service Address (ESA) for SuperStream compliant data transmission.

Submitting Superannuation Payments

Submitting superannuation payments requires adherence to SuperStream, a government standard for electronic transactions. SuperStream mandates that all superannuation data and payments be sent electronically in a standard message format, streamlining contributions to multiple funds in a single transaction.

A common payment method is using a Superannuation Clearing House (SCH). The ATO offers a free Small Business Superannuation Clearing House for employers with 19 or fewer employees. Commercial clearing houses are also available. When using a clearing house, the contribution is considered ‘paid’ only when received by the employee’s superannuation fund, not when received by the clearing house. Employers should account for processing times to meet quarterly due dates.

Employers can also pay directly to superannuation funds. This method requires sending both data and money electronically, complying with SuperStream standards. An Electronic Service Address (ESA) sends the data file to the fund, and the payment must be linked using a unique reference number.

Integrated payroll software systems often include SuperStream compliant features. These systems automate submitting data and payments directly to funds or through a clearing house. Ensuring data and payments are sent on the same day is part of SuperStream compliance.

Maintaining Records and Ensuring Compliance

Employers must maintain accurate and comprehensive records of superannuation payments, including payment receipts, employee contribution statements, and detailed payroll records. These records should be retained for a specified period, typically five years.

Failure to make superannuation payments on time or in full can result in the Superannuation Guarantee Charge (SGC). The SGC includes the unpaid superannuation shortfall, a 10% annual interest component, and a $20 per employee per quarter administration fee. Unlike on-time superannuation contributions, SGC amounts and penalties are not tax-deductible.

If a payment is late, employers must lodge an SGC statement with the ATO within 28 days after the original quarterly due date. The ATO uses SuperStream data matching to identify late or missing payments. Directors of companies can also face personal liability for unpaid superannuation debts.

Employees can verify their superannuation contributions by checking payslips, contacting their superannuation fund, or using their myGov account to view their ATO superannuation balance and contributions. This helps ensure employees receive their entitlements and can prompt early detection of any payment issues.