How much super do employers have to contribute for employees
The superannuation guarantee legislation requires employers to provide superannuation support for their employees. The minimum support required is 9% of an employee's notional earnings base.
For most employees, the notional earnings base is remuneration earned in their normal working hours (without payments for overtime). This is commonly called "ordinary time earnings".
Change from 1st July 2008
However, ordinary time earnings does not apply to some employees - rather, the basis of their superannuation is another earnings base. An employee's earnings base may be contained in:
- an industrial award
- an existing agreement they have with their employer
- a fund's trust deed, or
- a law.
These earnings base can be used until 30 June 2008. All employers must use "ordinary time earnings" from 1st July 2008 onwards to work out the minimum superannuation contributions which they need to pay for each of their employees.
From 1st July 2008, employers will simply multiply employees earnings base for the quarter by 9% and pay this amount to a complying superannuation fund.
Increase in contribution limit for employers
From 1st July 2007, there has been an increase in concessional contribution which an employer can contribute on behalf of most employees. In fact there is no maximum limit on which an employer can claim a deduction for superannuation contributions for employees.
However, on receipt of an amount in excess of the concession contribution cap by a complying superannuation fund, the member has to pay an additional tax of 31.5% (total tax of 46.5%) on amounts in excess of the concessional cap (taxed @15%) limit. The member may 
request the fund to pay this tax.
New limits are
|
Age |
Age Based Limit in 07 |
From 1st July 2007
|
|
Less then 35 |
15,260 |
50,000 |
|
Less then 49 |
42,385 |
50,000 |
|
Over 50 |
105,113 |
50,000 |
Transitional arrangement: If you turn 50 up to year 2012 concessional cap is $100,000.
Salary Sacrifice
Those who do not need money today can request their employers to contribute into a complying superannuation fund instead of paying them a salary. This way, employees can save the difference of tax between their marginal tax rate and superannuation tax rate of 15%.
Employers may not contribute 9% Super for their employees
Due to some Salary Sacrifice arrangements it is possible that some employers may short change their employees.
For example let us assume that Max is 34 years old and his salary is $100K plus Superannuation. Due to higher concessional contribution limit, Max decides to salary sacrifice $30,000 from his salary of $100,000.
Since employer's obligation is to pay 9% Superannuation support of earnings base. This earnings base has now reduced to $70,000, Max's employer can get away by contributing only $6,300 (9% of $70,000) instead of original $9,000.
If you have salary sacrificed in financial year ending 30th June 2007, you can check how much your employer contributed for you on your superannuation statement.
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