Employer Superannuation Guarantee obligations

All Australian businesses have obligations when it comes to super, even if you have just one or two employees. Meeting your obligations and managing super payments can feel complicated but it doesn’t need to be. Here are the key things you need to know when it comes to paying your employees Superannuation Guarantee (SG) contributions.

Paying SG contributions

If you’re running a business, you’ll know that you’re required to make mandatory SG contributions on behalf of your employees, currently set at 11% of ordinary time earnings (OTE). These contributions must be paid into a complying superannuation fund, such as Media Super.

The information below explains how to classify your workers and when you’re required to pay SG contributions.

Workers who are always classified as employees

The following workers are always treated as employees, and you must meet the same tax and super obligations as you do for any other employees.

• Apprentices
• Trainees
• Labourers
• Trades assistants.

Apprentices and trainees do both work and recognised training to get a qualification, certificate, or diploma. They can be full-time, part-time, or school-based and usually have a formal training agreement with the business they work for.

How to classify contractors

Some contractors are considered employees for superannuation purposes, for instance if you pay contractors mainly for their labour, they are employees for SG purposes, and it doesn't matter if they have an Australian business number (ABN).

Make super contributions for contractors if you pay them:

• Under a contract that is mainly for their labour
• To perform the contract work (work cannot be delegated to someone else)
• A sportsperson, artist or entertainer paid to perform, present or participate in any music, play, dance, entertainment, sport, display or promotional activity, or similar activity
• A person paid to provide services in connection with any performance, presentation or participation in these activities
• A person paid to perform services related to the making of a film, tape, disc, television or radio broadcast
• If the worker performs work that is wholly or principally of a domestic nature for more than 30 hours per week.

Workers you don’t have to pay super for

There are some workers you don’t have to pay super for:

• Aged under 18 years of age and working 30 hours or less per week
• Non-residents being paid for work done outside Australia
• Covered by bilateral superannuation agreements with other countries
• Certain senior foreign executives who hold certain visas or entry permits
• Paid to do work of a domestic or private nature for not more than 30 hours per week.

It’s important to classify your worker correctly for tax and super purposes. If you make an incorrect decision, you may face penalties.

We’re here to help

If you need further assistance, please refer to the ATO website or try the ATO’s Superannuation guarantee eligibility decision tool.

You can also find more information about your other super obligations on our website.

The following information is current as of March 2024. Please visit the Australian Taxation Office (ATO) for the most up to date information.