Superannuation for casual employees: What are the rules?

SHAY WARAKER
If you’re a casual employee, you could be entitled to superannuation. In this article, we break down who is eligible and what to do if your employer isn’t paying you super.

Regardless of your age or experience, if you’re a member of the workforce in Australia it’s a good idea to understand your entitlements when it comes to superannuation. This article will go through some of the main things a casual worker should be aware of when it comes to superannuation, and what you can do if you do not believe your employer is paying you what you’re entitled to. We cover:

What is superannuation?

Superannuation is a portion of your earnings and savings that is put in a fund and typically held there until you can access it at retirement. During this time, it is generally invested with the goal of accumulating an income you can use in your retirement.

The minimum amount of superannuation your employer pays into your fund is based on the Superannuation Guarantee (SG). At the time of writing, the SG scheme requires that employers make a compulsory superannuation contribution of 9.5% of your base salary, which includes casual loading, and most types of allowances and bonuses. Overtime bonuses are not included. This is set to increase annually on 1 July to reach 12% by 2025, starting with an increase to 10% in 2021.

Do casual employees get superannuation?

If you are over 18 and earn more than $450 a month (before tax), you may be entitled to superannuation, irrespective of whether you are a permanent or casual employee. However, the Federal Government’s 2021 Budget has proposed the scrapping of the $450 monthly threshold, meaning workers earning less than this amount will still be able to earn superannuation. This plan is expected to be put in place before July 2022.

Some organisations or employers may be exempt, and you can use the Australian Taxation Office (ATO’s) tool to determine if you are eligible for compulsory superannuation payments.

According to the ATO, employers have to pay super regardless of whether an employee:

  • is full-time, part-time or casual
  • receives a super pension or annuity while still working – including those who qualify for the transition-to-retirement measure
  • is a temporary resident, such as a backpacker or a working holiday maker – when they leave Australia, they can claim their super through the Departing Australia superannuation payment (DASP) program
  • is a company director
  • is a family member working in the employer’s business – provided they are eligible for SG.

For casual workers, the amount you are entitled to is based on the SG, which is currently 9.5% of your base wage, assuming you earn at least $450 a month (before tax). If you are aged under 18 or are a private or domestic worker (such as a nanny, housekeeper or carer), then to qualify for SG payments under the current rules you may also need to work more than 30 hours per week.

There are also several things you should be aware of when it comes to signing up for, or receiving, super:

  • You usually have the ability to choose your own super fund. If you do not choose your own, your employer will typically nominate its default fund for you.
  • You should be presented with a standard choice form when choosing a super fund or starting a new job.
  • Your employer should not attempt to sway or influence your choice of super fund.
  • While some employers may choose to make your super contributions every fortnight or every pay cycle, by law you must be paid super at least quarterly, by the 28th day after the end of each quarter.

Super funds differ when it comes to fees, investment strategies (such as high-risk or balanced), life insurance inclusions and performance over time. You may like to compare funds and consider your situation in determining which fund and investment option may be right for you. 

If you have worked in more than one job during your career and didn’t tell a new employer about your existing super fund, then under the current rules there is a chance you have more than one super account set up for you. Some people in this situation decide to consolidate their super funds to save on fees and keep their balance in one place, but you may want to do some further research into super consolidation before you begin.

It’s important to note that under proposed new rules due to come into force on 1 July 2021, if you are moving to a new job and have an existing super account, your employer will be required to make super contributions into your existing fund by default, unless you opt to switch to another fund.

What if my employer isn’t paying me super?

It’s important to know your rights as an employee when it comes to super, and you should consider monitoring your super account and payslips to ensure you’re being paid correctly and on time.

If your employer isn’t paying you the minimum amount of SG you’re entitled to by the correct date, then you might consider raising the issue with them first. You can ask them how often they’re paying your super and which fund they’re paying the money into, to clarify.

If your employer has not paid your super on time, they are obligated to pay a Superannuation Guarantee Charge to the ATO, that includes interest and an administration fee, as well as the SG payments you were entitled to. The ATO will then transfer this money (minus the administration fee) to your chosen super fund.

If you suspect your employer is not paying you super correctly, you can lodge a complaint with the ATO:

Australian Taxation Office

  • use the ATO’s complaints form
  • phone 1800 199 010 8am–6pm, Monday to Friday (local time)
  • fax 1800 060 063
  • write to Australian Taxation Office, PO Box 1271, Albury  NSW  2640

If you have a hearing, speech or communication impairment, you can phone the National Relay Service on 13 36 77.

Compare super funds

Cover image source: Monkey Business Images/shutterstock.com

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