To correctly pay employees’ super you need to know the current super rate, what ‘ordinary time earnings’ entail and which of your employees are eligible to receive super contributions.
What is the current Super Guarantee Rate?
The current super rate is 9.25%. This rate will rise every financial year until 2020 when it will be set at 12%. To accurately calculate your employees’ super you will need to apply this rate to your employees’ ordinary time earnings which won’t necessarily include all payments to your employees.
What are Ordinary Time Earnings?
Ordinary time earnings refers to the amount your employees earn for ordinary work hours. This includes payments to employees such as commissions and shift-loadings but does not include over-time payments. If you are unsure of what payments constitute ordinary time earnings, the ATO has a handy table here: http://goo.gl/xRKdOx
Which employees do I pay super for?
There are some employees that you do not need to pay super to. These include:
Employees you pay less that $450 a month (pre tax)
Employees under 18 working for 30 hours or less a month
Non-resident employees who work outside Australia
If an employee is earning above the maximum super contribution base you don’t have to pay super on the portion of their income above the base.
In most of these situations super payments are simply not compulsory and an employee can elect for super payments to be made for them.
If you need help calculating super for your employees feel free to contact us.
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- Related articles:
- Can My Business Claim on the Owners Salary / Wages?
- Tax Implications for Overpayments to Employees
The information in this document reflects our understanding of existing legislation, proposed legislation, rulings etc as at the date of issue. In some cases the information has been provided to us by third parties. While it is believed the information is accurate and reliable, this is not guaranteed in any way. Any advice in this publication is of a general nature only and has not been tailored to your personal circumstances. Please seek personal advice prior to acting on this information.