Common mistakes with Employer Super Obligations
The Australian Tax Office (ATO) runs education campaigns for business owners in the services industries to help them better understand their super obligations.
These are some of the most common mistakes employers make
The Most Common Mistakes
- Not paying enough super
- Missing the quarterly cut-off dates (28 October, 28 January, 28 April, 28 July)
- Not understanding that sometimes they need to pay super for contractors, even if the contractor quotes an Australian Business Number (ABN)
- Not keeping accurate super records
- Not passing an employee's tax file number (TFN) on to their super fund
- Not lodging a superannuation guarantee charge statement if they're late paying their employee super or don't pay enough super.
How do you pay and who do you pay it to?
Generally, employees are eligible for super if all of the following apply:
- They are between 18 and 69 years old (inclusive)
- They are paid $450 (before tax) or more in a calendar month
- They work on a full-time, part-time or casual basis. Currently, employers need to contribute (as of July 2014) a minimum of 9.5% of their eligible employees' ordinary time earnings as a Super Guarantee to a complying super fund by the quarterly
What happens if I miss a payment deadline?
If employers are late paying their employees super or don't pay enough super, they must lodge a superannuation guarantee charge statement with the ATO. How do I treat Contractors? Employers need to pay super contributions for contractors they pay under a contract that is wholly or principally for the labour of that person - even if the contractor quotes an ABN.
Keeping good records
Employers must keep records that show
- The amount of super they paid for each employee and how it was calculated;
- That they have offered their eligible employees a choice in super fund;
- How they calculated any reportable employer super contributions.
- Remember to pass on your employee's TFN
- If an employee gives their employer their TFN for super purposes, the employer must pass on their employee's TFN to the super fund within 14 days of receiving it. If employers don't pass on their employee's TFN, they will be liable for a penalty.
Useful Tip: To see if you’re entitled to receive the Super Guarantee, and what is regarded as ‘salary’, visit the Super Guarantee Explained page
Need to know if you're an employee or contractor?
Try this government decision tool
- The regulator ASIC has an Employer or Contractor Decision-Making Tool that's a great place to start to learn more an important and often confusing distinction in employment terminology.
Frequently Asked Questions: Mastering Employer Super Obligations
Does the $450 per month threshold still apply?
No. In 2026, the $450 per month threshold is a legacy concept. You must pay super for all eligible employees, including casuals and part-timers, regardless of how much they earn in a calendar month. If your payroll software is still filtering out low-income earners, you are facing a significant compliance risk.
How do I calculate the Super Guarantee for 2026?
The calculation is a "Black and White" formula based on Ordinary Time Earnings (OTE). As of the 2025/26 financial year, the rate is 12%:
$$SG\ Contribution = OTE \times 0.12$$
OTE includes regular hours, shift loadings, and commissions, but generally excludes overtime. Miscalculating what constitutes OTE is one of the most common ways employers inadvertently underpay.
Is a contractor with an ABN really an employee for super?
This is a major "Financial Train Wreck" for small businesses. If you engage a contractor principally for their personal labour (their physical or mental skill) rather than for a specific produced result, they are an employee for super purposes. An ABN does not provide a Sovereign shield against your obligation to pay their 12% SG.
What is the 'Superannuation Guarantee Charge' (SGC)?
If you miss a quarterly deadline (28th of Oct, Jan, Apr, July), the cost is Absolute. You cannot pay the fund directly; you must lodge an SGC statement with the ATO. The SGC is not tax-deductible, includes nominal interest, and adds an administration fee per employee. In 2026, the ATO's automated data-matching makes late payments almost impossible to hide.
What is 'Payday Super' and when does it start?
The 2026 landscape is shifting toward Payday Super, mandated to begin on July 1, 2026. This will require employers to pay super contributions on the same day they pay salary and wages. While the quarterly cycle remains for the first half of this year, a Sovereign business owner should be aligning their cash flow now to avoid the liquidity shock of this upcoming institutional change.
Disclaimer: Superannuation law is subject to frequent legislative change. In 2026, the intersection of Real-Time Reporting and 12% SG rates makes professional oversight a baseline requirement. For a clinical audit of your payroll obligations, we recommend a confidential consultation.
Call us today on 1300 137 403 or email us here for a no-obligation private chat about your situation.
Drew Browne is a specialty Financial Risk Advisor working with Small Business Owners & their Families, Dual Income Professional Couples, and diverse families. He's an award-winning writer, speaker, financial adviser and business strategy mentor. His business Sapience Financial Group is committed to using business solutions for good in the community. In 2015 he was certified as a B Corp., and in 2017 was recognised in the inaugural Australian National Businesses of Tomorrow Awards. Today he advises Small Business Owners and their families, on how to protect themselves, from their businesses. He writes for successful Small Business Owners and Industry publications. You can read his Modern Small Business Leadership Blog here. You can connect with him on LinkedIn. Any information provided is general advice only and we have not considered your personal circumstances. Before making any decision on the basis of this advice you should consider if the advice is appropriate for you based on your particular circumstance.
