How Superannuation Guarantee Contributions (SGC) is Calculated

  • The Superannuation Guarantee Contribution is calculated based on the individual employee's base earnings. The charge percentages are applied to how much each employee earns.
  • There is a difference in the interpretation of the SGC criteria in terms of whether earnings to make up the $450 monthly minimum should include all Salary and Wages or whether an employee's Ordinary Time Earnings should be used.
  • To allow clients a choice, the dollar value of Superannuation Guarantee earnings in Preceda may be calculated by two methods. The method used is dependent on Program Control PAY29 to be configured correctly and the entry of data into the SGC OTE and SGC S&W options.
  • The calculation of Super Guarantee is based on the age of the employee and the amount earned during a month and are setup in the SGC Rules option.
  • The minimum age for payment of Super Guarantee is 18, unless the employee earns more than $450 for the month and works for more than 30 hours for any week.

  • There are several qualification checks to determine an employee's eligibility for SGC. SGC does not have to be paid in the following scenarios:

    • Minimum Age and Maximum Age - When an employee is younger than the Minimum Age or older than the Maximum Age as indicated on the SGC Rules screen, SGC payments are not calculated.

    • Min Earnings Per Month - When an employee's Ordinary Time Earnings (OTE) for the month are below the value set in the Min Earnings Per Month field of the SGC Rules screen, SGC payments are not calculated.
    • Min Hours/Week if Under 18 - When an employee who is less than 18 years old is paid less hours in a week than is defined in the Min Hours/Week if Under 18 field of the SGC Rules screen, SGC payments are not calculated.
    • Quarterly Max Earnings Base - When an employee is paid more in a quarter (3 months) than is defined in this field on the SGC Rules screen, SGC payments are not calculated on any amounts paid over the maximum earnings base value.

 

Week 1 19 Hours $166.46
Week 2 19 Hours $166.46
Week 3 19 Hours $166.46
Week 4 19 Hours $166.46
Total hours for the month 76 Hours  
Total earnings for the month   $665.84

 

Since more than $450.00 was earned for the month, exemption is not applicable. But as the employee is under 18 and has not worked for more than 30 hours in any one week, Superannuation guarantee is not applicable.

 

Week 1 20 Hours $160.00
Week 2 50 Hours $400.00
Week 3 0 Hours $ 0.00
Week 4 29 Hours $ 232.00
Total hours for the month 99 Hours  
Total earnings for the month   $792.00

 

Since the total amount paid was over $450.00 and the employee worked for more that 30 hours in any one week, the contribution amount is calculated only on the amount earned in the week.

 

Every year, the ATO provides employers with a figure that will be the Quarterly Maximum Earnings Base (MEB). This figure is the value that the Superannuation Guarantee ceases to paid on behalf of the employee. Information entered in the SGC Rules option is used to calculate this if the employee qualifies for SGC.

Example:

  • The MEB calculation is done when monthly dates are entered into the SGC processing option (e.g. 01/07/2011 to 31/07/2011).