Statutory obligations of employers

In 1992, a superannuation guarantee scheme was established by the Superannuation Guarantee (Administration) Act 1992 (Cth) and the Superannuation Guarantee Charge Act 1992 (Cth). The superannuation guarantee scheme indirectly requires employers to make superannuation contributions on behalf of their employees by providing that employers are liable to pay a superannuation guarantee “charge” to the Australian Taxation Office (ATO), but that charge will be reduced (possibly to nil) if they make superannuation contributions on behalf of their employees.

The amount of the charge is determined on a quarterly basis. To avoid the charge in respect of a quarter employers must:

• • make at least the minimum superannuation contributions on behalf of all eligible employees;
• • pay the minimum superannuation contribution into a complying superannuation fund or retirement savings account; and
• • pay the minimum superannuation contribution by the cut-off date for payment for that quarter.

The charge is payable for a quarter for which the employer fails to meet these requirements. The amount of the charge comprises:

• • the total of the “individual superannuation guarantee shortfalls” for each employee (calculated on the employee’s total salary and wages rather than ordinary time earnings);
• • interest of 10% per annum on that amount; and
• • an administration fee of $20 per employee for whom there is an individual superannuation guarantee shortfall for the quarter.

See What are the superannuation obligations on employers?