Mr Taxman
Change the way you feel about taxes.
Get informed and discover what the taxman doesn't want you to know.
Sharing it with Australia, Mr Taxman is a regular Woman’s Day columist and TV finance commentator
  • click to visit Mr Taxman on Twitter
  • click to visit Mr Taxman on FaceBook
  • rss

Is Super Compulsory?

Jul 17, 2011

What is the least amount of superannuation you can pay? Can you email payroll and decide to not pay super anymore?

As a young property investor, I’m intending to be financially secure well before my superannuation would be released to me and may not even need it. I’ve recently taken up a contract role with a significant increase in pay (still as a PAYG employee), and now I’m paying nearly $250 a week in super. What I’d really like to do is use that money in my property investing to pay off my debt faster. What is the legal requirement, and how can you request a change to the level?

I looked into a Self Managed Super Fund, but I only have $70.000 in super at the moment so it isn’t really viable.

I had the very same query back in 1992 when compulsory super was first introduced when I was a lowly-paid university student and every dollar counted! 

When you are employed, your employer must pay super, known as superannuation guarantee (SG) contributions, on your behalf into a complying super fund.   SG contributions are paid every quarter by your employer at a minimum of 9% of your “ordinary time earnings”, up to the “maximum contribution base”. 

You are only entitled to have SG contributions paid on your behalf from your boss if you are between 18 and 69 years old and you are paid $450 or more before tax in a month.  It doesn’t matter whether your employment status is fulltime or casual nor if you’re only a temporary resident of Australia.  Those under 18 you must work more than 30 hours per week in order to be entitled have super contributions paid on their behalf.

The maximum contribution base limits the maximum amount of super support that employers have to provide each quarter. It’s indexed annually.  For the 2010/11 year the limit is $42,220 per quarter (equivalent to an annual salary of $168,880).  Your employer doesn’t have to pay SG contributions for any earnings above this limit.

Ordinary time earnings are used to work out any SG contributions payable for employees.  They are usually what you earn during ordinary hours of work and include allowances, bonuses, commissions and any over-award payments.  Ordinary time earnings exclude annual leave loadings, expense reimbursements and any overtime payments.

Over the next decade, the SG is being increased commencing with a 0.25% increase in the 2013-14 and 2014-15 years, followed by 0.5% rises each financial year until the SG reaches 12% in 2019/20.

The thing to remember is that the super is still your money, albeit in a different investment vehicle.  I despised compulsory super back in 1992 but twenty years’ on I am extremely grateful that a start was made to my future retirement.

If you are unsure if you are receiving the correct amount, then you can go to my website www.mrtaxman.com.au for an employee superannuation guarantee tool to determine your eligibility for the SG.

 

This article first appeared in the June 2011 issue of Your Investment Property Magazine www.Yipmag.com.au. Copyright Key Media Pty Ltd 2011.

Tags: EmployeesEmployersPersonal taxSMSFSuper

Author: Mr Taxman

Comments

"Hello Dear Sir/Madam. I am Mr. Jorge Becker, a private money lender. I give out loans with an interest rate of 3% per annual and within the amount of $1000.00 to $500,000,000.00 as the loan offer. 100% Project Funding with secured and unsecured loans are available. We are guaranteed in giving out financial services to our numerous clients all over the world. With our flexible lending packages, loans can be processed and funds transferred to the borrower within the shortest time possible. We operate under clear and understandable terms and we offer loans of all kinds to interested clients, firms, companies, and all kinds of business organizations, private individuals and real estate investors. Just complete the form below and get back to us as we expect your swift and immediate response. EMAIL : jorgebeckerloans1@gmail.com Attention!!! Do you have a bad credit? Do you need money to pay bills? Do you need to start up a new business? Do you have unfinished project at hand due to bad financing? Do you need money to invest in some area of specialization which will profit you? and you don’t know what to do. We offer the following loans below, personal loans[secure and unsecured] business loans[secure and unsecured] combination loans students loans consolidation loans and so many others. 1. Full Names:………………………. 2. Contact Address:………………….. 3. Loan Amount Needed:……………….. 4. Duration of the Loan………………. 5. Direct Telephone Number:…………….. Email jorgebeckerloans1@gmail.com Best Regards, Mr. Jorge Becker "

By: Mr. Jorge Becker on Apr 09, 2015 12:13AM

Post a New Comment

Media Availability

Are you interested in booking Mr Taxman for a speaking engagement or requesting his viewpoints for an article?

comments-rhsLatest Comments

  • "DO YOU NEED A LOAN!!! Email: bnunoloans@yahoo.com Hi, I am a private lender who give out loan to private and corporate individuals. Have you been turned down by so many banks? Do you..."

    By: bnun at Apr 14, 2015 3:26AM

    Post: The secret to getting your loan approved

  • "Hi, I have a HELP debt of approximated $30,000 and have an annual income of $61,000. My employer automatically adjusts my tax to cover the HELP debt, but my last two tax returns there has been..."

    By: Neil Gaskell at Apr 13, 2015 1:49AM

    Post: Two important dates for those with HECS/HELP debts

  • "Hello to you all out there, I am Dr Tushar Sean and i work under a co-operate finance / body to generate funds to lift up ones finance. Since this institute of investing with a small amount to get..."

    By: Tushar Sean at Apr 11, 2015 9:25PM

    Post: Claiming car expenses

  • "Hello Dear Sir/Madam. I am Mr. Jorge Becker, a private money lender. I give out loans with an interest rate of 3% per annual and within the amount of $1000.00 to $500,000,000.00 as the loan offer..."

    By: Mr. Jorge Becker at Apr 09, 2015 12:13AM

    Post: Is Super Compulsory?

  • "Hello Dear Sir/Madam. I am Mr. Harley, a private money lender. I give out loans with an interest rate of 3% per annual and within the amount of $1000.00 to $500,000,000.00 as the loan offer. 100%..."

    By: Mr Harley Poul at Apr 08, 2015 5:07AM

    Post: Reverse mortgages