Are you getting all your entitlements each payday?
Life can be busy, but it’s important to stop and check you are being paid the superannuation that you are legally due on a regular basis, from your very first job, whether it is part-time, permanent or casual.
Employers, regardless of how big or small the business is, are required by Federal Government law to pay at least 9.5% of all eligible workers’ ordinary time earnings to their super accounts if they earn more than $450 a month (before tax).
This is called the Superannuation Guarantee (SG) and it can be hard to keep track of if you change jobs, or work several part-time jobs or if you are employed on a casual basis.
Employees under 18 must earn over $450 a month (before tax) and be working more than 30 hours a week to be eligible and there are exemptions for some non-resident and government and military employees.
For very high income earners, employers are not required to pay SG on earnings in excess of a limit called the 'maximum super contribution base'.
The responsibility to pay SG is entirely on the employer and they can pay an SG charge if they don’t.
The basic rate of SG will rise to 12% by 2022, but some employers already voluntarily pay more than the current 9.5% basic rate of SG.
So with different rates, various payment time requirements and the fact that you might have several jobs or employers, it can be wise to try to keep a check on what you are receiving, where it is being paid and whether you can manage your entitlements more efficiently.
Tips to keep track of your super
- Make sure your super fund has your tax file number (TFN)
- Check your super balance online or when you receive your statement from your fund
- Compare the amounts on your payslip and your statement
- Chase any lost super
- Let your super fund know when you move either residence or employer
Engagement is key
Sometimes it can be hard to take an interest in superannuation when you are young or busy, and trying to understand what all the information means can be difficult, especially if you are starting a new job.
It’s understandable that you might not feel comfortable asking your employer questions about your superannuation, but it is your money, so try to find out everything you want to know to build your retirement savings.
As an employee, you can’t just rely on checking your pay slip to ensure that SG has been paid.
Employers are only required to pay SG quarterly. Wages are typically paid weekly, fortnightly or monthly.
While an amount might appear on your pay slip, the figure is hypothetical, and employers can legally wait up to four months before actually paying the money to their employees’ superannuation funds.
Any lost investment or accrual of funds can have an effect on your retirement income.
The earlier you can start to take control of your funds, the more likely you will be able to achieve the lifestyle you want in retirement.
Talking to a financial planner can be one way of finding out your investing options at any stage of your life, but just reading your payslips and statements can be a good habit to start reinforcing when you are young or just starting in the workforce.
When should my employer contribute?
- Ask your employer to where your SG payments are being paid and how often that happens
- Work out what you should be receiving by calculating approximately 9.5% (or your rate of SG, if it is more) of your earnings every three months, or quarter
- Check your approximation against your super fund statement that is sent at least annually
You should be able to see what contributions have been made by your employer on your super fund statement so you can check if payments are being made in a timely way.
If you already have more than one super account you can bring them together to help you keep track of your total and possibly minimise any fees or charges you might be paying.
You can discuss any potential changes you might be considering with your employer to make sure your current details are correct so that payments continue to be made to your superannuation fund no matter where you live or work in Australia.