Compare superannuation with employer size discounts

Learn how you can start planning for your retirement. RateCity compares superannuation products from 100 Australian Superannuation funds. Compare super fund rates with employee size discounts - Data last updated on 31 Mar 2019

Compare employer size discount superannuation

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Some superannuation funds offer employers a discount on the super plan they nominate for their employees, depending on the number of employee members who are joined when the plan commences.

This, in turn will affect the premiums that employee members of the fund have to pay. Effectively, the employees should end up paying less in premiums.

Depending on the details of the plan, if an employee member leaves, the discount may then be removed meaning that the employer’s premiums will generally increase. Even if the employee continues in the designated fund after leaving their employer, any plan discount may cease to apply, as it is specific to the employer.

Which employees need to be paid super?

Regardless of whether or not you get an employer size discount, if you are paying an employee at least $450 before tax in a calendar month, you will generally have to pay super guarantee (SG) on top of their wages.

If your employee is under 18 or is a private or domestic worker, they must also work for more than 30 hours per week to be eligible. “Private or domestic” means work relating to you personally, rather than to your business, or work relating to your home, household affairs or family (such as a nanny or housekeeper). You have to pay super for some contractors, even if they have an Australian business number (ABN).

You need to pay super to eligible workers, regardless of whether the employee:

  • is full-time, part-time or casual
  • receives a super pension or annuity while working
  • is a temporary Australian resident
  • is a company director
  • is a family member

Employees not eligible for super include:

  • non-resident employees being paid for work they do outside Australia
  • some foreign executives who hold certain visas or entry permits (call 13 10 20 for information)
  • employees paid under the Community Development Employment Program
  • members of the army, navy or air force reserve for work carried out in that role
  • employees temporarily working in Australia who are covered by a bilateral super agreement. You must keep a copy of the employee’s certificate of coverage to verify the exemption.

Choosing an employee super fund

The fund you choose must be authorised to offer a MySuper product, no matter whether you do or don’t receive an employer size discount. These are known as 'employer-nominated' or 'default funds'.

When selecting a super fund for your employees, begin by checking the applicable industrial awards. Your industry may have default super funds, under an award.

Check the fees the fund will charge your employees. Low fees are generally good, but look at what your employees will get for their money.

MySuper products must have a diversified investment strategy. Risks, returns and fees can vary. Consider the types of employees you have and what may best suit them (for example, if the average age of your employees is under 30, you might choose a more aggressive fund).

It might be best to choose a fund that has performed well over (at least) the last five years, not just last year's strongest performer.

Does the fund offer any extras? Some funds offer educational seminars and advice.

FAQs

Superannuation is paid by employers to employees, at least once every three months. The ‘superannuation guarantee’ is currently 9.5 per cent – which means that your employer must pay you superannuation equivalent to 9.5 per cent of your salary. The guarantee is scheduled to rise to 10.0 per cent in 2021-22, 10.5 per cent in 2022-23, 11.0 per cent in 2023-24, 11.5 per cent in 2024-25 and 12.0 per cent in 2025-26.

Superannuation is generally taxed at 15 per cent. However, if you earn less than $37,000, you will be automatically reimbursed up to $500 of the tax you paid. Also, if your income plus concessional superannuation contributions exceed $250,000, you will also be charged Division 293 tax. This is an extra 15 per cent tax on your concessional contributions or the amount above $250,000 – whichever is lesser.

You can withdraw your superannuation when you meet the ‘conditions of release’. The conditions of release say you can claim your super when you reach:

  • Age 65
  • Your ‘preservation age’ and retire
  • Your preservation age and begin a ‘transition to retirement’ while still working

 

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^Words such as "top", "best", "cheapest" or "lowest" are not a recommendation or rating of products. This page compares a range of products from selected providers and not all products or providers are included in the comparison. There is no such thing as a 'one- size-fits-all' financial product. The best loan, credit card, superannuation account or bank account for you might not be the best choice for someone else. Before selecting any financial product you should read the fine print carefully, including the product disclosure statement, fact sheet or terms and conditions document and obtain professional financial advice on whether a product is right for you and your finances.

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