How Superannuation Guarantee Charge (SGC) is Calculated

• The Superannuation Guarantee 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 dependant on Program Control Option PAY29 to be setup 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.

Example 1: A 16-year old employee earning more than $450.00 per month

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.

 

Example 2: A 17-year old employee who is paid $8.00 per hours

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.

 

Maximum Earnings Base

Every year, the ATO provides employers with a figure that will be the Quarterly Maximum Earnings Base (MEB). This figure ($43,820.00 for 2011/2012 tax year) 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).

 

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