Pay your super contributions monthly

Paying super for your employees monthly ensures you don’t miss the quarterly payment deadlines. Missing the payment deadlines can mean you become liable for what’s called the ‘superannuation guarantee charge’, which is made up of three components:

• your outstanding super contributions;
• interest on that amount; and
• an administration fee. 

These outstanding contributions are calculated on a higher base salary or wages rather than ordinary times earnings or notional earnings base. 

In addition, these payments aren’t tax deductible.
 

Am I required to pay super contributions for a contractor?

You have to pay super contributions to a person engaged under a contract that is wholly or principally for labour, though your contributions need only be calculated on the labour component of the contract.

If you make a contract with someone other than the person who will actually be providing the labour, you are not required to make super contributions. 

This would occur:

• If you make a contract with a company, trust or a partnership, or
• If the person you have the contract with is free to hire other people to perform the work, even if the person ends up performing the work themselves.