As a general principle all employers in Australia are required to make a payment each quarter to each employee’s chosen superannuation fund of an amount equal to (currently) 9.25% of “ordinary earnings,” subject to a cap on the level of contributions annually.  This is known as the Superannuation Guarantee.

Note that the Superannuation Guarantee increased from 9% to 9.25% on the 1st of July, 2013 and is scheduled to increase in stages until it reaches 12% from the 1st of July, 2019.

There are limited exemptions from paying the Superannuation Guarantee for employees who have been employer sponsored:

  • Where a foreign senior executive is residing in Australia as the holder of a visa prescribed by the Superannuation Regulations. This exemption normally applies to a 457 sponsored employee who has been appointed by a company operating in Australiain the capacity of a National Managing Executive, a Deputy Managing Executive, or a State Manager.
  • Employees who are working temporarily in Australia where there is an international Social Security Agreement in place which provides that the employer is not subject to the Superannuation Guarantee scheme in respect of the work for which the payment is made. Australia currently has international Social Security Agreements with 13 countries, including the USA.

Subject to the above exemptions, employers who are intending to sponsor a skilled worker for a visa should plan to pay the Superannuation Guarantee.

457 visa holders can also anticipate being in a position to recover their superannuation contributions if they permanently depart Australia, subject to a tax charge equal to 35% of the gross fund value.  Ideally the repayment of contributions should be claimed within 6 months of leaving Australia, as superannuation funds for temporary residents are transferred to a Government controlled fund after that date – on which no interest or other value will accrue.

The team at GM Corporate helps employers meet their superannuation obligations. We can:

  • Prepare the Australian payroll
  • Calculate the resulting superannuation obligation,
  • Where required – typically for clients with a small number of sponsored employees where the administrative function is outside Australia– arrange the payment of PAYG with held from salary and superannuation contributions through our client bank account in Australia.

Our financial planning associates can also assist with the setting up of superannuation arrangements in Australia (including the employer’s default superannuation fund) and can discuss investment and risk products as required.

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If you would like to discuss your requirements or would like some more information, please contact us.

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