How to work out when employers need to pay super guarantee and which employees are eligible.
What super payment is required
If you pay a worker, you are also required to pay super guarantee. You need to pay it to an eligible employee’s super fund regardless of how much they are paid. Employees under 18 must work more than 30 hours in a week.
Before 1 July 2022, you only needed to pay super guarantee if you paid your worker $450 or more (before tax) in a month.
As an employer, you use:
- ordinary time earnings (OTE) to work out the minimum super guarantee contribution for your employees – OTE is the amount you pay employees for their ordinary hours of work
- salary and wages to work out the super guarantee thresholds and calculation of shortfalls such as the super guarantee charge.
When to pay super
The amount of an employee’s super guarantee is determined when they are paid, not when the income is earned.
This means if you pay an eligible employee on or after 1 July 2022, you will need to pay their super regardless of how much they have earned, even if some of the pay period it relates to is before 1 July 2022.
Generally, all employees are eligible for super. It doesn’t matter if the employee is:
- full-time, part-time or casual
- receiving a super pension or annuity while working (this includes employees on transition to retirement)
- a temporary resident, such as a backpacker
- a company director
- a family member working in your business.
There are additional eligibility rules for some employees. These are explained below.
You can use the eligibility tool to work out if you have to pay super for a worker.
Employees under 18
You must pay super guarantee on payments you make to an employee under 18 years if they work for you more than 30 hours in a week, regardless of how much you pay them.
Before 1 July 2022, an employee aged under 18 years was only paid super guarantee if they worked for you more than 30 hours in any week and you paid them $450 or more (before tax) in salary or wages in a calendar month.
Example: under 18 years of age and working more than 30 hours in a week
Lily is 17 years old. From the 20th to the 24th of June 2022 she worked 32 hours at a local hardware store and earned $800 before tax. Her employer paid her on 2 July 2022. She also works 6 hours a month as a barista for a cafe down the road, earning $150.
As Lily worked over 30 hours in one week in her job with the hardware store, her employer will need to pay her super on the $800 earned as she was paid after 1 July 2022.
As Lily does not work 30 hours in a week in her job as a barista, she won’t be entitled to super for this work. Likewise, Lily won’t be entitled to super for any weeks she works less than 30 hours for the hardware store.
End of example
Domestic or private workers
Domestic or private workers do work:
- relating personally to you (not to a business of yours)
- relating to your home, household affairs or family – such as a nanny, housekeeper or carer.
You must pay super on payments you make to domestic or private workers if they work for you more than 30 hours in a week, regardless of how much you pay them.
Before 1 July 2022, you needed to pay super on payments to domestic or private workers if they worked for you more than 30 hours in a week and you paid them $450 or more (before tax) in salary or wages in a calendar month.
You may also have to pay super for domestic workers or carers if the following both apply:
- you have a National Disability Insurance Scheme (NDIS) plan that you manage yourself
- you use your funds to hire a carer or other domestic worker.
You must pay super for contractors if you pay them mainly for their labour. Before 1 July 2022 you needed to pay them $450 or more (before tax) in a calendar month for them to be eligible for super guarantee.
This is the case even if they quote an Australian business number (ABN).
Your worker is eligible for super even if they are a temporary resident, such as a backpacker or a working holiday maker.
If you send an Australian employee to work temporarily in another country, you must continue to pay super contributions for them in Australia.
For employees working overseas, you can apply for a certificate of coverage so you don’t have to pay super in the other country as well.
However, you do not have to pay super for:
- non-resident employees who work outside Australia
- some foreign executives who hold certain visas or entry permits (phone us on 13 10 20 for information)
- employees temporarily working in Australia who are covered by a bilateral super agreement – you must keep a copy of the employee’s certificate of coverage to prove the exemption.
If you’re a non-resident employer, you do not have to pay super for resident employees for work they do outside Australia.
If you’re self-employed as a sole trader or in a partnership, you do not have to pay super guarantee for yourself.
Armed forces reservists
You do not have to pay super for members of the army, naval or air force reserve for work carried out in that role.
High income earners who opt out of super
You do not have to pay super for high-income earners working for multiple employers who ask you not to pay super guarantee to them.
You must have an SG employer shortfall exemption certificate for the employee. We will send you the certificate after the employee has applied to us to opt out.