An individual or company conducting business in Australia needs to consider its obligations to pay superannuation contributions in respect of its Australian employees.
Compulsory contribution legislation requires an employer to:
- pay superannuation for its eligible employees. An employee is eligible if they are aged between 18 and 69 (both inclusive), are paid at least the prescribed amount (currently A$450 (before tax) in a calendar month) and work full-time, part-time or on a casual basis;
- contribute to the correct superannuation funds; and
- pay contributions by the cut off date on a quarterly basis (being no more than 28 days after the end of the quarter).
The minimum superannuation amount payable is 9% of each eligible employee's earnings base (although the Federal Government has committed to raising this rate from July 2013). Employees can direct their employer to contribute more than the statutory minimum contribution to their superannuation fund.
An employer may also have to pay superannuation for employees who are visiting Australia on an eligible temporary resident visa.
Most employees are entitled to select their own superannuation fund, unless they are employed under certain state awards, industrial agreements or workplace agreements or they are in a particular type of defined benefit fund. Employer-nominated funds are also required to offer minimum life insurance death cover to members.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.