Australian superannuation: obligations for your business

What superannuation means for you as an employer

Superannuation – or ‘super’ – contributions build up over the years to fund people’s retirements. As an employer, it’s your legal responsibility to understand the rules around paying superannuation for your employees and adapt your payroll process.

Cracking this financial admin means you help look after your employees’ financial security, meet legal requirements with confidence, and avoid the super guarantee charge (SGC) for late or incorrect contributions.

Understanding superannuation contributions

You must pay super contributions for all your eligible employees, no matter how much they earn. This includes:

• Anyone over 18 years, or under 18 who works more than 30 hours a week
• Part-time and casual staff
• Temporary residents like backpackers
• Most independent contractors (more details below)
• Staff who are on leave, including paid sick leave and long-service leave

You pay these super contributions into each employee’s chosen super fund or retirement savings account. The ATO monitors these payments, and you need to report to them how much you’ve paid.

Here’s more info on tax and super from the Fair Work Ombudsman

Superannuation rates in Australia

Super is calculated as a percentage of an employee’s OTE (ordinary time earnings), which might include bonuses and allowances. You don’t usually pay super on overtime, but it’s worth reading up on the ATO rules. The current minimum rates are as follows:

• Until the end of June 2025, the rate is 11.5%
• From 1 July 2025, the rate is 12%

Here’s more from the ATO about super rates and overtime

How to pay your employees’ superannuation

Here are the steps to pay super for each member of your team.

1. Ask your employees to choose a super fund or savings account

It’s up to each employee to choose where they invest their pension savings. Offer them a choice of super funds or retirement savings accounts (RSAs). If an employee doesn’t pick a fund, you can pay their super into your default fund.

Here’s more from the ATO on offering a choice of super fund

2. Check the super fund details

On setting up each employee’s super fund, make sure to enter the correct information to avoid any problems or delays. You’ll need their:

• Tax file number (TFN) – usually nine digits
• Australian business number (ABN) – 11 digits long
• Unique superannuation identifier (USI) – a unique code assigned to each super product
• Super fund name – it’s worth double-checking the spelling

3. Calculate the superannuation amount

Multiply your employee’s OTE by the super rate. For example, if their yearly OTE is $50,000 and the super rate is 11.5%, their super contribution is $50,000 x 11.5% = $5,750.

Learn more from the ATO on calculating super

4. Make your super payments through SuperStream

You must use SuperStream – the mandatory electronic gateway – to pay super contributions. You could do so through each super fund’s online portal, but it’s easier to invest in payroll software.

Xero simplifies the whole process of paying your team. It automates lots of the work for you – including paying each employee’s super into the right fund – and fully complies with STP (Single Touch Payroll) requirements.

Read up on single touch payroll

Make your payments on time

Whatever else is happening in your business, don’t be the employer not paying superannuation on time! It’s part of your Australian superannuation obligations. If you’re late you’ll be fined the super guarantee charge, including any interest.

You’ll probably need to pay super to your employees’ super funds every 3 months. Here are the quarterly deadlines:

• 1st quarter (July to Sept) contributions by 28 October
• 2nd quarter (Oct to Dec) contributions by 28 January
• 3rd quarter (Jan to Mar) contributions by 28 April
• 4th quarter (Apr to June) contributions by 28 July

Some super funds require employers to contribute monthly, so check the individual websites.

Here’s more from the ATO on deadlines for super

What happens if you miss a super payment

The ATO keeps a sharp eye on all STP reports to spot employers not paying superannuation. Employees can also alert the ATO if they think they haven’t been paid in full, on time, or to the right super fund.

Try to pay any overdue super contributions as soon as you can. You’ll need to:

1. File a super guarantee charge statement with the ATO

2. Pay the missing amount and the SGC (including any interest)

Check out more ATO info on missing super payments

How to stay in control of your superannuation contributions

Here are some ways to nail your Australian super obligations.

Automate your super payments

Want to avoid the financial admin every quarter? Xero STP software makes your wage, tax, and super payments for you. Easy!

Set up calendar alerts

Automating reminders on your phone or computer gives you one less thing to worry about. Organise alerts in advance of the deadlines to give yourself some prep time.

Get professional advice

The right accountant or bookkeeper can give you those all-important insights into staying compliant with your super. Find one in the Xero advisor directory.

FAQs on employer superannuation

Let’s get clear on your employer superannuation rules.

What should I do if I’ve missed a payment deadline?

Pay the overdue superannuation as soon as you realise – including any interest – and report the late payment to the ATO. Once that’s done, review your payroll processes to prevent stress and financial penalties next time. Think about payroll software like Xero to simplify your payroll.

Here’s more about Xero payroll software

Do I need to pay super for my casual employees?

Yes, you must pay super for all your staff, including casual employees and temporary residents like backpackers. There is no earning threshold to be met before super payments begin.

Get more info from the ATO on eligibility for super

Do I need to pay superannuation for contractors?

It depends. You must pay super for an independent contractor if you hire them mainly for their labour – if you hire them for a fixed number of hours rather than to achieve a particular result for a project, say.

Read ATO info on super for contractors

Can I claim tax deductions on superannuation payments?

Yes – as long as you pay your super contributions on time, you can use them to lower your tax bill. So keep your pay records in order so you know exactly how much you’ve paid in total – something Xero cloud-based software can help with because it organises all your financial data in one place.

Here’s ATO information on tax offsets

What happens if I’ve lodged the wrong super fund amount?

If you’ve accidentally lodged a tax return with the wrong super fund, amount, or details, ask the ATO for an amendment. Do this promptly to minimise any interest on charges.

Find more ATO details on amending tax rerns

Ace your super obligations with Xero accounting software

Paying your employee super is simple with Xero. Let the automatic calculations work out the right super contributions every time, then relax as Xero’s STP-compliant software lodges your salary, wage, PAYG, and superannuation details without a hitch. And all your pay and financial records are kept in one central place in the cloud, ready whenever you need them.

See what Xero can do for your small business payoll