Employers Super Obligations

Australia’s superannuation system celebrated its 30th birthday in 2022 and since its introduction in 1992, it’s been recognised by the World Bank as the ‘world’s best practice for the provision of retirement income’1. Over the years, the super guarantee has increased in small increments and currently sits at 10.5% in 2022. It will continue to rise by 0.5% a year to reach 12% in 2025.

Employees eligible for super

Whether your employees work on a full-time, part-time or on a casual basis (including those on temporary visas), if they’re aged 18 or over, they’re generally eligible to receive super.

There are different rules around employee entitlements, including paying super for contractors.

Calculating your employees’ super

From 1 July 2022, the minimum super rate for eligible employees is 10.5% of their salary2. Sometimes, a higher percentage of super is agreed by an award or employment agreement. For award rates information, please visit Fair Work Australia.

Ordinary time earnings

Ordinary time earnings (OTE) is the amount employees earn for their ordinary hours of work. This generally includes annual leave, sick leave and long service leave. If loading, allowances, overtime and commissions are part of an employee's pay, calculating the ordinary time earnings can be more complex. The ATO’s OTE checklist identifies payments which could be salary or wages, and highlights if they're part of OTE3 .

Using OTE to calculate super payments

You can use an employee’s OTE to calculate their super. Simply multiply the employee’s OTE by their super rate.

Super payments on overtime

Overtime is generally excluded from super payment calculations because it falls outside of OTE. But overtime counts as OTE in some instances4 .

In some cases, you may need to pay super on overtime.

Super payments on leave

With so many different types of leave, it can be confusing to know who’s eligible for what. Paying super on leave depends if it’s part of OTE. Leave types generally included in OTE: • Annual leave • Sick leave • Long service leave.

Leave types generally excluded from OTE: • Parental leave (maternity, paternity, adoption) • Unused annual leave, sick leave, or long service leave as part of a termination payment • Jury duty • Defence Forces reserves leave.

Please note: you can choose to pay super on some of the above excluded leave types. For example, parental leave.

Super payments on bonuses

If you offer your employees bonuses on top of their regular wage, you may also need to pay super on bonuses.

Super payments – how often

Super payment frequency for employees is at least once a quarter. You can choose whether it’s one payment, or multiple payments across the quarter. The frequency may depend on whether there are award or employment agreements that set out a specific payment frequency.

1. apra.gov.au - History of super 2. Changes to this rate were legislated at 1 July 2022 3. australiansuper.com - Your super obligations 4. ato.gov.au - Super for employers

Sponsored by AustralianSuper Pty Ltd, ABN 94 006 457 987, AFSL 233788, Trustee of AustralianSuper ABN 65 714 394 898.

This information may be general financial advice which doesn’t take into account your personal objectives, situation or needs. Before making a decision about AustralianSuper, you should think about your financial requirements and refer to the relevant Product Disclosure Statement. A Target Market Determination (TMD) is a document that outlines the target market a product has been designed for. Find the TMDs at australiansuper.com/tmd. AustralianSuper Pty Ltd ABN 94 006 457 987, AFSL 233788, Trustee of AustralianSuper ABN 65 714 394 898.

This article was supplied as part of a paid advertising package.