Testing if Someone is a Contractor or Employee. Hiring someone as a contractor who should be an employee is known as sham contracting and carries heavy penalties. Paying into a superannuation fund is mandatory by Australian labour laws, and it requires employers to contribute when the salary paid on any given month for earnings of $450 or more. The fund covers most employees, but there are guidelines that determine who is eligible to participate. The superannuation guarantee and super on overtime and bonuses. As an employer, if you don’t pay the required SG contributions into your employees’ super accounts by the quarterly due date, you may have to pay a Superannuation Guarantee Charge (SGC) to the ATO. AccountRight calculates the amount of superannuation you need to pay on behalf of your employees, but on occasions the figure calculated might appear to be wrong. Therefore, you must first decide if a person you hire is an employee or a contractor. A pension (/ ˈ p ɛ n ʃ ə n /, from Latin pensiō, "payment") is a fund into which a sum of money is added during an employee's employment years and from which payments are drawn to support the person's retirement from work in the form of periodic payments. As an employer, you must pay your employees at the correct rate, as well as any entitlements they are eligible for. The cut off dates are 28 days after the end of each quarter, so usually the 28th of January, April, July, and October. Generally, you legally have to contribute superannuation payments on behalf of an employee if the employee is at least 18 years of age, and is receiving at least $450 per month (before tax) in a calendar month. U.S. Department of Labor: 200 Constitution Ave NW Washington, DC 20210 1-866-487-2365 TTY 1-877-889-5627 The wages and entitlements your employee is eligible for can depend on: age; industry; qualifications; work duties and responsibilities; Minimum wage. The SGC includes all the SG amounts owing to an employee… Superannuation: A superannuation is an organizational pension program created by a company for the benefit of its employees. This means that it is ultimately the ATO’s responsibility to collect unpaid superannuation on behalf of employees. Pay superannuation for each of your employees at least quarterly, before the cut off date. If you don’t pay your employees’ superannuation when you’re supposed to, you could face some significant penalties. The superannuation guarantee (SG) is the minimum percentage of an employees’ wages paid into their super – and it’s a legal requirement. It is also referred to as a company pension plan . You can also consider paying monthly if that suits your payment cycle or bookkeeping better. The first rule is that you must pay superannuation for anyone who is an employee. The current SG rate is 9.5%. 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