What is superannuation and why should you care? We’re here to help by defining what it is, when your employer needs to pay it, and to unpack the top things you need to know surrounding superannuation to keep your mind at ease.
Superannuation is an arrangement put in place by the Australian Government to encourage individuals to accumulate funds, providing them with an income stream when they retire.
What does that mean for you? Well, it’s a form of forced savings for your retirement. Superannuation is 100% compulsory and employers must pay this in addition to your wages and by a specific time.
As the ATO (Australian Taxation Office) notes, “Your super is your future. Super, or superannuation, is the money set aside during your working life for when you retire.”
If you are currently residing in Australia but are from overseas and plan to leave Australia permanently, you can claim your funds back after you leave. If you have a working holiday visa, find out if you should be paid superannuation here.
1. When does your employer need to pay your superannuation?
Mark your calendars! The superannuation due date is 28 days after the financial quarter has ended (generally this falls on the 28th of the following month). The next one this year is due on the 28th of July. For your reference, if the due date falls on a weekend or holiday, it will be rolled through to the next working day.
No need to stress if you don't see the funds in your account on the day that they're due. You can expect the funds to actually arrive in your super account approximately three to five working days after the processing date, depending on your super company’s processing times.
Source: Australian Taxation office https://www.ato.gov.au/Business/Business-activity-statements-(BAS)/In-detail/Activity-statement-generate-dates/
2. How is superannuation calculated?
Now we're getting to the nitty gritty of your super. To ensure that you're being paid the correct amount, here's how you calculate what you should be receiving:
Your superannuation is calculated based on SGC (Super Guarantee Charge) and is 9.5% of your Ordinary Time Earnings (OTE). These are earnings that are considered eligible for superannuation. These earnings include shift loading, and ordinary hours. However, keep in mind that they do not include overtime hours or certain allowances, such as expense allowances.
There are also a few rules for when SGC applies and when you start accruing super:
- You accrue superannuation regardless if you are full time, part time, or casual.
- You must earn over $250.00 before tax in a calendar month. If you fall under the General Hospitality Award, you must earn over $350.00 per month.
- If you are under 18 years of age or a private/domestic worker (such as a nanny), you must work more than 30 hours per week to qualify.
- You do not accrue superannuation if you are a member of the army, naval, or air force reserve for work carried out in that role.
Still with us? Awesome, you're through the most complicated part of superannuation.
3. What are employees responsible for?
As an employee, it’s your legal right to nominate your own superfund granted that you are working under a federal award or former state award. It is also your responsibility to ensure that you keep track of your account, including updating your employer with any changes to your fund or contact details.
If you are currently employed and have not received the forms to nominate your own super fund, you can complete the Super Standard Choice Form directly from the ATO.
Hot tip: If you work for BENCHMARQUE, this can be found in your employment portal.
When it comes to your super fund, there are three choices that you should know about. When you nominate your own superfund, you must fall under one of these options:
- APRA (complying superfund regulated by the Australian Prudential Regulation Authority).
An APRA-regulated fund is the most common super fund. It essentially means that you choose a superfund company of approved under the Superannuation Industry (Supervision) Act 1993. A quick Google search will provide you with an extensive list of growth funds. It's up to you to pick which one works best for you!
- Employer default (if your employer has one).
This default fund is pretty self explanatory. Your employer already has a fund setup so you don't need to choose one. We recommend ensuring that your employer's fund is compliant by having a look online.
- SMSF (self-managed super fund).
A self-managed super fund (SMSF) is setup and managed by yourself. You'r held responsible for complying with the super and tax laws so it takes a little bit more time and skills.
To set up an SMFS, there is a list of things you need to do in order to successfully set it up, including appointing your trustees, registering your fund and getting an ABN, preparing an exit strategy, and much more. Find the entire list here.
Visit the super fund lookup page on the ATO's website for a more detailed explanation of these options along with all of the different types of super funds.
4. What are an employee's rights surrounding superannuation?
It’s a legal requirement that superannuation has to be paid by the due date each quarter if you meet the prerequisites, as listed above.
If you are a temporary resident, such as a backpacker or working holiday maker and decide to leave Australia, you can claim the payments you made through the Departing Australia Superannuation Payment (DASP) Program.
5. What to do if you’re not getting paid superannuation ?
If you find that you haven’t received any payments into your fund after you allowed over five business days past the actual due date, don't freak. Simply check in with your employer directly. Always give them the benefit of the doubt before making a claim.
Paying superannuation from an employer’s perspective is actually a complex process governed by strict policies, so give your employer the courtesy of time if you think there has been an oversight, but be proactive about it. If it continues to happen after you’ve spoken to your employer, you can contact FairWork for some assistance.
Speaking of getting paid, here's what to do if you're not being paid your salary on time.
Still have some questions surrounding superannuation?
We recommend visiting the ATO’s website directly for further details and explanation.
As per the above, all best practice hospitality employers should be paying super. Working for BENCHMARQUE guarantees compliance, like paying your superannuation on time.
Browse our open roles below and join the BENCHMARQUE network.