Are you getting all your entitlements?
Life can be busy, but it’s important to stop and check you are being paid the superannuation that you’re 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’ salary or wages (and some other employer payments) 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'. Some high income earners, with multiple employers, may apply to have an employer exempted from providing SG for a quarter if they’re likely to exceed their contribution limits due to SG.
The responsibility to pay SG is entirely on the employer and they are subject to significant penalties if they don’t. Employers are required to make contributions on at least a quarterly basis.
The basic rate of SG is currently planned to rise to 12% by 2025, but some employers already voluntarily pay more than the current minimum rate of 9.5%.
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’re receiving, where it’s 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 (remember that 15% tax is paid on employer super contributions in a taxed superannuation fund)
- Find any lost super. You can search for any lost super by contacting the ATO or finding it through your myGov account
- 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’re young or busy, and trying to understand what all the information means can be difficult, especially if you’re starting a new job.
It’s understandable that you might not feel comfortable asking your employer questions about your superannuation, but it’s 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 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 an estimate, and employers can legally wait up to three months before 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’ll be able to achieve the lifestyle you want in retirement.
Reading your payslips and superannuation account statements can be a good habit to get into to know what your investment options are at any stage of your life. You may also want to talk to a financial planner to discuss your situation and options.
How to check your employer contributions
- Ask your employer which fund your SG payments are being paid to 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 pre-tax earnings every three months, or quarter
- Check your approximation against your super fund statement that is sent at least annually (remembering that 15% contributions tax is applied to employer contributions)
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 manner.
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.