Do Casual Employees Get Super? An Australian Guide to Superannuation for Casual Workers
Did you know that casual employees in Australia are entitled to superannuation just like their full-time and their part time or casual-time counterparts? That’s right! Under the superannuation guarantee legislation, all employers must pay a minimum of 11% super for all eligible staff, whether they’re full-time, part-time, or casual.
This legislation ensures that working Australians are guaranteed to have some level of retirement savings. But how does this work for casual employees, and what are their rights? Let’s dive in and find out Do Casual Employees Get Super?
Do Casual Employees Get Super?
In Australia, employers must pay at least 11% super for casual staff over 18 years old and are not otherwise exempted from Superannuation Guarantee contributions. It applies to casual employees regardless of age, as long as they meet the eligibility criteria. For casual employees under 18 years of age, they need to have worked at least 30 hours per week to be eligible for super contributions.
The average annual salary in Australia is $68,900, with skilled and experienced workers earning around $108,980 annually. With the cost of living rising yearly, understanding your superannuation entitlements as a casual employee is more important than ever.
How are Super Contributions Calculated for Casual Employees?
One of the basic rules of super is that employers are only required to make super contributions for employees who earn $450 or more before tax in a calendar month. However, this $450 threshold applies to income from each employer separately, meaning that if a casual employee works for multiple employers and earns less than $450 from each, they may miss out on super contributions.
Casual Employees and the $450 Threshold
Super contributions for casual employees are calculated in the same way as for permanent staff. If a casual worker meets the eligibility criteria, their employer must pay super into the worker’s super fund at least once a quarter. From 1 July 2023, employers are required to pay super equivalent to 11% of an employee’s ordinary time earnings.
Casual Workers Under 18:
In Australia, casual workers under 18 years of age are eligible for superannuation if they meet certain criteria. They must work at least 30 hours a week and earn more than $450 (before tax) in a calendar month. If these conditions are met, their employer is obligated to make Superannuation Guarantee (SG) contributions for them.
Maximum Contribution Base:
A maximum contribution base limits the earnings per quarter for which an employer is required to pay the SG. For the 2023-24 financial year, this limit is $62,270 per quarter. Earnings above this threshold are not subject to compulsory super contributions.
Personal and Additional Contributions:
Employees can also contribute to their super funds. These contributions, known as non-concessional contributions, can be up to $100,000 per year. Salary sacrifice arrangements are another way employees can contribute to their super, where they forgo part of their salary in return for employer-provided super contributions.
For low-income earners, the government may contribute to their super fund through co-contribution and low-income super tax offset incentives.
Super Fund Choices:
Most employees can choose which super fund their employers contribute to, with various types of super funds available.
Tips for Casual Employees to Maximize Their Super
Casual employees in Australia have several ways to maximize their superannuation (super) contributions and ensure a secure retirement. Here are some key tips:
- Check for Eligibility and Contributions: As of July 1, 2022, all employees, including casual workers, are entitled to superannuation contributions from their employers, irrespective of their earnings. It means you should receive super contributions even if you earn less than $450 a month.
- Understand Your Superannuation Rights: Superannuation is a government-mandated retirement savings program in Australia, and employers must contribute 10.5% of their ordinary time earnings towards it. It includes basic wages and any shift loadings.
- Consolidate Multiple Super Accounts: You might have super accounts with different funds if you’ve worked multiple jobs. Consolidating these into a single account can reduce fees and make it easier to manage your retirement savings.
- Voluntary Contributions: Consider making additional voluntary contributions to your super fund. These can be from pre-tax income or after-tax savings and may be eligible for tax benefits or government co-contributions
- Review Fund Fees and Performance: When choosing a super fund, pay attention to the fees and investment performance. Lower fees can significantly increase your retirement savings over time.
- Life Insurance Considerations: Many super funds offer default life insurance coverage. Reviewing this cover and assessing if it’s necessary for your situation, especially for younger workers who may not need it, is important.
- Regularly Check Payslips and Super Statements: Ensure your employer makes the correct super contributions by periodically checking your payslips and super fund statements. Contributions should be made at least quarterly.
- Report Non-compliance: If you believe your employer is not making the correct super contributions, you can report them to the Australian Taxation Office (ATO)
- Please seek Professional Advice: Superannuation can be complex, and it’s advisable to seek guidance from a qualified financial advisor or the ATO for personalized advice tailored to your circumstances.
Frequently Asked Questions:
Do casual employees get super if they earn less than $450 per month?
As of 1 July 2022, even if an employee earns under $450 a month, they must still be paid the Superannuation Guarantee – the old exemption no longer applies.
Do international casual employees get super?
Yes, international casual employees, such as temporary residents, backpackers, or working holidaymakers, are eligible for super guarantee contributions.
What happens if my employer doesn’t pay my super contributions?
If you suspect your employer is not paying your super contributions, you can report them to the Australian Taxation Office (ATO)
The Bottom Line:
In conclusion, casual employees in Australia are entitled to superannuation, just like full-time and part-time employees. Casual workers need to be aware of their rights and entitlements and take steps to ensure they’re getting the most out of their super. Casual employees can secure a more comfortable retirement by staying informed and proactive.
*The information this blog provides is for general informational purposes only and is not intended as financial or professional advice. The information may not reflect current developments and may be changed or updated without notice. Any opinions expressed on this blog are the author’s own and do not necessarily reflect the views of the author’s employer or any other organization. You should not act or rely on any information contained in this blog without first seeking the advice of a professional. No representation or warranty, express or implied, is made as to the accuracy or completeness of the information contained in this blog. The author and affiliated parties assume no liability for any errors or omissions.