The superannuation guarantee legislation requires employers to contribute to their employees’ nominated superannuation fund, provided they earn more than $450 in a month  and they are between 18 and 70 years old. The rate of the superannuation guarantee is currently 9% of gross wages, though there are tentative plans to increase this to 12% in coming years.

For high income earners, there is no requirement for employers to pay more than the statutory limit of the superannuation guarantee. For the 2012 income tax year, the statutory limit is $15,775.20. Whilst employers may may superannuation contributions above this statutory limit, they are not required to do so under superannuation guarantee legislation.

Superannuation guarantee contributions must be made at least every quarter and must be made no later than 28 days after the end of each quarter. If superannuation contributions are not made by the due date, and employer must prepare a Superannuation Guarantee Statement and pay the amount outstanding to the Australian Taxation Office, as well as a penalty. The Australian Taxation Office will honor all superannuation guarantee contributions that employees have not been paid, and they now have the ability to pursue company directors for any unpaid amounts.

The Superannuation Guarantee (Administration) Act 1993 sets out the rules and regulations of the scheme, and defines who is eligible for protection under it. The definition of an employee for superannuation guarantee purposes does not necessarily mean a person who earns wages. If a contractor’s work meets the definition of ordinary time earnings, then they may be eligible for superannuation guarantee payments. The fact that someone is a contractor with an ABN who submits invoices for payments does not necessarily preclude them from superannuation guarantee entitlement.

You should always check your quarterly statement to ensure your superannuation guarantee contributions have been made by your employer. If payments have not been made you should check with your employer before contacting the Australian Taxation Office.