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Superannuation may not be very exciting or seem like something you need to think about now, but ensuring all your superannuation payments are correct could make a big difference when you retire. This factsheet will explain some of the basic rules around superannuation including how much you should get and when, and what you can do if you do not get paid all or some of your superannuation entitlements.
Superannuation (or ‘super’) is a compulsory system of placing a minimum percentage of your income into a superannuation fund which will become your retirement savings.
Most modern awards contain a superannuation clause requiring employers to make superannuation contributions to a superannuation fund for the benefit of an employee to avoid the employer having to pay the legislated superannuation guarantee charge.
Under superannuation legislation employees can choose their own superannuation fund.
You can nominate your chosen superannuation fund by completing the Superannuation Standard Choice Form and proving it to your employer. You can follow the link below to find the form on the Australian Tax Office website:
https://www.ato.gov.au/Forms/Superannuation-(super)-standard-choice-form/
Employers will have a default fund that they use if you do not choose your own superannuation fund.
The minimum superannuation you should currently be receiving is 10.5% of your ordinary time earnings (see below for an explanation of ordinary time earnings). It is scheduled to progressively increase to 12% by 2025.
Superannuation should be paid by your employer into your nominated fund at least quarterly (i.e. at least every three months). The current superannuation guarantee percentage is the minimum required by law. You may be entitled to a higher amount under a modern award or an enterprise agreement.
Employees can also make voluntary contributions to their superannuation to increase their savings.
Ordinary time earnings are the amounts you earn for your ordinary hours of work which include:
An employee’s ordinary hours are the normal hours they work. For a full-time worker, this may be 38 hours or a number of hours and for a part-time worker, this will be the agreed minimum hours as in an award or agreement.
If you can’t determine the normal hours of work the actual hours the employee works are their ordinary hours of work. For example, casual workers hours may vary and their ordinary hours are the hours they actually work.
However, payments received for working overtime are generally not considered ordinary time earnings and therefore do not attract a payment for superannuation.
Have a look at the example pay slip below:
You can see from Jenny’s pay slip above, that she received payment in this pay period for her ordinary hours, an allowance, and overtime.
She is paid $71.19 superannuation which is 10.5% of payments received for ordinary hours (i.e. $600) and the allowance (i.e. $78), totaling $749.19.
She has not received superannuation on the $300 payment for overtime hours worked.
You can see the 10.5% superannuation is calculated on her gross ordinary time earnings of $678 (i.e. before tax is taken out). Her superannuation has been calculated correctly this pay.
No. Previously, employees needed to earn at least $450 per month to attract superannuation payments.
However, there has been a change to the law and from 1 July 2022, employers will be required to make super guarantee contributions to their eligible employee’s super fund regardless of how much the employee is paid.
If employees are paid less than their minimum entitlements, including superannuation, they can make claims to be back paid.
The South Australian Employment Tribunal (SAET) is the jurisdiction to determine underpayment of wages and unpaid superannuation claims.
You can lodge a Money Claim for your unpaid superannuation. See their website for more information.
https://www.saet.sa.gov.au/industrial-and-employment/money-claims-monetary-claims/
It is also possible to report your employer to the Australia Tax Office (ATO) if they have not paid your superannuation. Here is a link to information about reporting your employer to the ATO:
https://www.ato.gov.au/calculators-and-tools/report-unpaid-super-contributions-from-my-employer/
Contact the Working Women’s Centre SA if you need advice about claiming outstanding superannuation entitlement.
