Who do I need to pay superannuation for?

You must pay superannuation for workers when they meet eligibility criteria. Under new legislation¹ effective from 1 July 2022, this includes paying Superannuation Guarantee contributions for workers earning less than $450 a month. The legislation removes the $450 monthly income threshold for super contributions.

Contractors are eligible for super if the majority of the dollar value of what they are supplying is their labour.

Workers who are already receiving a pension or annuity through super are still entitled to receive SG payments, as are temporary residents, who can reclaim money paid into a super fund on their behalf when they leave the country.

If you send an employee overseas to work, you must still pay their super entitlements, and the same goes for any family members contributing their labour to your business.

From 1 July 2022, if you employ someone under the age of 18, you must pay SG contributions on their earnings if they work more than 30 hours per week, irrespective of their monthly level of earnings. This follows the removal of the $450 monthly income threshold for super contributions under legislation that will come into effect from 1 July 2022.

Employers can apply for a certificate exempting them from paying the Super Guarantee if they engage the services of a highly paid individual who has two or more employers and is likely to exceed the concessional contributions cap, which was increased from $25,000 per year to $27,500 per year from 1 July 2021.

Workers who take up the option of paid parental leave present a cultural challenge for businesses. While they are not eligible for Super Guarantee payments during the period they are utilising the taxpayer-funded benefit, the Fair Work Ombudsman has recommended that ‘best practice’² for employers is to maintain the super payments while the employee is caring for their new child.

As an employer, it is your responsibility to keep accurate, up-to-date records of how much Super Guarantee money you have paid for each employee, and how you calculated that figure. That applies even if you have chosen a clearing house to distribute the funds. The records must be kept for at least five years.

You must also provide evidence that you have offered your employees a choice of superannuation fund, and that your company’s default fund offers a MySuper product.