The Superannuation Guarantee (SG)
SG is a compulsory contribution which all employers need to make on behalf of each of their eligible employees. Employer contributions are paid directly to each employee's nominated super fund, or a default fund on their behalf
Choice of fund
Choice of Fund legislation allows eligible employees to choose the super fund that their super is paid into. For those employees who are eligible, you must provide the Standard Choice form, which is an Australian Tax Office form, to employees within 28 days of their start date. If your employee doesn’t make a choice you must pay their super contributions into their stapled fund. If they don’t have a stapled fund, you pay their super into your business’s default fund.
Provide tax file numbers to us
Providing your employees' tax file numbers (TFNs) is very important. If you don’t provide your employees’ TFNs to us, they won’t be able to make any voluntary contributions and may pay more tax on their super than necessary.
When an employee has given you their TFN, the law requires that you pass it on to their super fund. It is generally required that you do this when you next make a contribution for any employee who has given you their TFN.
However, if you receive an employee’s TFN within 14 days of sending your contribution for the employee, then you have up to 14 days from receiving the TFN to pass it on to the fund.
Your TFN responsibilities are to:
- accept TFNs from your employee,
- respect the privacy of employees who quote you their TFN, and
- pass on their TFN when you next make a contribution to the employee’s superannuation fund.
Offer your employees choice
Most Australian workers are eligible to choose their super fund.
For those employees who are eligible, you must provide a Standard choice form [PDF 164KB] to them within 28 days of their start date.
You are not required to offer choice of fund to employees if you are already paying super contributions for them under, or in accordance with:
- a state industrial award or preserved state agreement,
- a federal industrial agreement such as an Australian Workplace Agreement (AWA),
- a pre-reform AWA, pre-reform certified agreement, collective agreement,
- an old industrial relations agreement, individual transitional employment agreement (ITEA), or
- a workplace determination, or enterprise agreement (these are defined terms in Federal industrial relations law).
Some state and federal public sector employees are also excluded from choice of superannuation fund.
If the award or agreement simply refers to superannuation guarantee legislation without mentioning a specific fund, employers must offer choice of super fund.
You may need professional advice to work out whether an award applies to your employees. We recommend:
- checking with your employer organisation,
- referring to the Department of Employment website. to or
- contacting the workplace relations department in your state or territory.
You are not required to provide the Standard Choice form to employees who hold temporary visas, although they are eligible to choose the fund they would like their super payments made to.
Relevant visas include:
- Working Holiday visa (subclass 417)
- Work and Holiday visa (subclass 462)
- Temporary Graduate visa (subclass 485)
- Temporary Work (Entertainment) visa (subclass 420)
- Temporary Work (International Relations) visa (subclass 403)
- Temporary Work (Long Stay Activity) visa (subclass 401)
- Temporary Work (Short Stay Activity) visa (subclass 400)
- Temporary Work (Skilled) visa (subclass 457)
For more information on default employer funds, paying contributions to your employees’ chosen funds, and keeping records, please visit ATO website.
Claim a tax deduction
You can claim a tax deduction for super payments you make for employees in the financial year you make them. Contributions are considered paid when the super fund receives them; it’s not enough that the money has left your bank account. We suggest that you pay before 17 June to allow sufficient time for the funds to be transferred.
SuperStream is the name of the Superannuation Data and Payment standards you need to be compliant with when paying super contributions for your employees. Under SuperStream, you need to pay your employees’ super contributions online. The Sunsuper clearing house is a simple SuperStream solution with is simple to use and will save you time.