What is an employer’s superannuation contribution liability?

For many employed Aussies, employers’ super contributions are the main source of their nest egg. While not all employees qualify for super guarantee (SG) contributions, those eligible must receive retirement payments that are a percentage of their earnings.

At the moment, the minimum employers’ super contribution is 9.5 per cent of each eligible employee’s pre-tax wages. That means employers must put aside that proportion of each employees’ salary to pay to super funds. The minimum payment is scheduled to go up to 10 per cent by July 2021.

If you’re an employee entitled to SG contributions, consider tracking your super fund balance to confirm that these contributions are received every quarter. You can do this in your MyGov account and it’s often noted on your payslip too.

Are employers’ super contributions tax-deductible?

You cannot claim a tax deduction for super contributions that are made by your employer from your salary before tax, including your super guarantee (the minimum 9.5 per cent) or salary-sacrificing payments.

You can, however, claim a deduction for some personal contributions from after-tax income. These may include investments or after-tax salary. These are considered concessional contributions and are subject to yearly limits.

What are the due dates for employer super contributions?

The ATO requires employers to make super contributions every quarter, but employers can choose to make payments every month or even every fortnight. The quarterly deadlines for making super contributions are listed below:

1. For the July to September quarter, the deadline is 28th October.
2. For the October to December quarter, the deadline is 28th January.
3. For the January to March quarter, the deadline is 28th April.
4. For the April to June quarter, the deadline is 28th July.

If employers don’t make the super contributions for the respective quarters by these dates, they may have to pay a penalty and file a statement with the ATO.

For most businesses, the above dates are the dates by which the employees’ super funds should have received the SG contributions. The only exception is small businesses using the Small Business Superannuation Clearing House, whose SG contributions are considered paid on the date they’re received and accepted by the clearing house.

Employees need to remember that the concessional contributions cap, which includes SG contributions, is calculated for the financial year ending June 30th. If employers’ super contributions for the April to June quarter are not received by this date, they are counted towards the next financial year.

Further, if employers fail to make super contributions by the quarterly deadline, employees should consider asking the employer about the delay. If the employer doesn’t fix the situation or respond, employees can report the employer to the ATO. In some cases, the ATO may take action against non-compliant employers even if employees don’t file a complaint.

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