What to do if your employer is not paying you super

Co-author: TJ Ryan 

Is your employer contributing the right amount to your super fund? It should be 9.5% of your pay.

The 2014-2015 audit of the ATO found that as many as 11%-20% of employers aren’t making correct superannuation contributions for their employees. Their research shows that Australian workers are missing out as much as $2.85 billion in unpaid super each year. Research conducted by Industry Super Australia and Cbus indicates that the total may be much higher, as much as $5.6 billion for the2013/14 financial year.

The ATO says that non-compliance with super contributions is mostly seen with small businesses and industries that mostly pay employees in cash or as contractors. Unfortunately, this largely affects lower-paid and younger employees who are paid in cash or are on temporary contracts – those for who every dollar of super counts.

Super non-compliance for these employees may mean more people relying on the Age Pension later in life, and a larger drain on government coffers.

And as the ATO points out, even contractors are entitled to super.

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What your employer should be paying you

Is your employer contributing the right amount to your super fund? Here’s how you can tell:

  • If you earn $450 or more before tax per month, your employer must generally contribute 9.5% of what you earned to your super fund. This is not taken out of the $450 or more that you earned, but is a separate amount paid straight into your super fund. The ATO has an online tool to help estimate the super you are owed.
  • Your employer must pay super at least four times a year by the end of each quarter. These amounts will show up in your payslips or your payment summary.
  • When you check your super fund – and you should make a habit of doing that regularly – you should see that the contributions have been added.
  • When you check the ATO’s website for lost super, you should find that your Tax File Number (TFN) does not have any unclaimed super in any other super funds.

Check your latest payslips, and if your employer has not been contributing the correct amount you should contact them immediately to find out why not.

If your employer does not correct their error and back-pay you the correct amount of superannuation, you can lodge an enquiry with the ATO using their Employee Superannuation Guarantee tool. In 2014-2015, the ATO received more than 18,000 employee complaints about non-payment of super contributions, and they conduct 5,000 to 6,000 audits of employers every year.

Penalties increased for non-payment

The Turnbull government announced legislation in March 2018 that seeks to increase the penalties for employers who fail to pay staff their correct super. Currently before the senate, the new bill increases penalties and makes employers personally liable for super guarantee payments.

Along with strengthening the powers of the ATO to enforce the collection of missing super, the new laws also legislate jail terms for employers in some circumstances. Serious offenders face up to 12 months of imprisonment for failing to pay employees their due.

This is a reversal of the government’s 2015 plans which would have reduced penalties for non-payment of super. However, the new legislation has been combined with a proposed 12-month long amnesty for employers to pay back what is owed without being subject to financial penalties.

The new laws would also require super funds to report super guarantee payments directly to the Tax Office, allowing the ATO to take more timely action against non-payment. This seeks to remove the burden of notifying the ATO from the employee, who are sometimes unaware or unwilling to raise the issue themselves.

Be sure of your super obligations

For individuals: https://www.ato.gov.au/Individuals/Super/Keeping-track-of-your-super/

For employers: https://www.ato.gov.au/Business/Super-for-employers/  

Are you currently in the market for a super fund that has comprehensive advice available on their products? Check out our comparison table below which features a snapshot of some of the funds we currently rate.

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