Superannuation Guarantee Contribution (SGC)

The SG Legislation requires employers to pay a minimum level of superannuation for each of their employees. The current level for 2011/12 is 9%.

If your employees are covered by an Award or Employment Agreement, which specifies an amount that is more than the SG amount, you must pay the higher amount.

The members who fall into the categories below are exceptions under the SG Legislation:

• Members who receive less than $450 in any calendar month
• Members aged 70 or over
• Members under 18 years of age who work less than 30 hours per week (ie. part time)

Employees can be employed on a full-time or part-time basis under SG. These categories are defined as follows:

• Full Time - More than 30 hours per week
• Part Time - Less than 30 hours per week
• Casual - Not defined for SG purposes

The Australian Taxation Office operates a telephone enquiries service to assist employers and employees under the SG Legislation. You may contact the ATO on 13 10 20 or www.ato.gov.au.

The definition of an employed member of ACSuper is one of the following:

• Actually at work with a participating employer
• On annual leave
• On paid sick leave
• On long service leave
• On workers compensation
• On a strike - if back pay is subsequently made.

You have to pay SG contributions for each eligible employee at least four times a year, within 28 days after the end of each quarter, as shown in the table below. Superannuation contribution periods tie in with the quarters of the financial year.   

What you Need to Do

From 1 July 2007 when your employee fills out a Tax File Number Declaration Form (NAT 3092), you must pass on your employee’s TFN to the super fund or RSA if you make contributions to them.

If you do not pass on your employee’s TFN:

• You will be guilty of an offence and liable to pay a penalty,
• The super fund or RSA may have to pay extra tax on the contributions, and
• Your employee may miss out on Super Co-contribution payments.

If you make employer contributions for an employee, you need to give the Fund the TFN within 14 days of receiving the employee’s Tax File Number Declaration Form. But if you do not make a contribution for the employee in that period, you may pass the TFN on when you make a contribution.

Why does the Fund Need the TFN?

Your employees face significant consequences if their super funds do not have their TFN’s. For example, their super fund may be taxed an additional 31.5% and their super fund may not be able to accept personal contributions. This means eligible employees could miss out on receiving a government super co-contribution.

What happens if you don’t pass on the TFN?

From 1 July 2007, the ATO will check that employers pass on employee TFNs to the relevant super fund or RSA.
It is an offence not to provide an employee’s TFN to their super fund or RSA within the required timeframe. Penalty may apply and they apply for each employee.

Responsibilities

Your TFN responsibilities are to:

• respect the privacy of employees who quote you their TFN;
• accept TFNs from your employees; and
• pass them on when you next make a contribution to the Trustee of ACSuper.

An employee is not obliged to provide their TFN to you.

How to Seek Further information

For further information on your TFN superannuation responsibilities – passing TFNs on to superannuation funds, visit www.ato.gov.au