The SGC age limit refers to the age of an employee who is eligible to receive mandatory employer super contributions.
Superannuation Guarantee Contirbutions (SGC) are required to be paid by an employer into an employee’s super account.
SGC must be paid by the employer on at least a quarterly basis.
The amount of SGC an employer is required to pay equated to 9.5% of an employee’s salary.
For example, if an employee earns $100,000 per year, the employer must pay $9,500 per year into the employee’s super account.
SGC payable in addition to the employee’s ordinary wage.
The calculation of SGC is based on the employee’s ordinary time earnings (OTE).
Ordinary time earnings is generally inclusive of salary, wages, allowances, commissions and loadings; but not overtime payments.
SGC Age Limit
Generally, an employer will need to pay SGC to an employee if the employer pays the employee $450 or more (pre-tax) in a calander month.
There is no age limit for SGC.
Therefore, regardless of the employee’s age, an employer must pay SGC into their super account.
There are some SGC exemptions to be mindful of.
The previous superannuation guarantee age limit of 70 was abolished from 1 July 2013.
Work Test Over Age 65
The work test requires the member to have worked at least 40 hours over a 30-consecutive day period in the financial year the contribution is received.
The superannuation work test must also be met prior to the contribution being received.
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There is, however, an exception to the rule:
The work test does not apply for the first 12-months after the end of the financial year that the member last met the work test, if the member has a total super balance below $300,000.
Maximum Super Contribution
There are two contribution caps specific to SGC payments.
The concessional contribution cap relates to the maximum concessional contributions that a member can receive in any one financial year.
The current concessional contribution cap is $25,000 per financial year.
There is no concessional super contribution age limit. The concessional cap is $25,000 for all ages.
The maximum contribution base is the maximum ordinary time earnings that an employer is required to pay to an employee.
|Financial Year||Maximum Contribution Base|
For example, if an employee earns $60,000 in one quarter in the 2019/2020 financial year, the employer is only required to pay SGC on $55,270 for that quarter.
Therefore, there would be an SGC limit of $55,270 x 9.5% = $5,250.65
Tax on SGC
SGC payments made into a superannuation account are classified as concessional contributions.
All concessional contributions incur standard contributions tax of 15% upon entry to a superannuation fund.
An additional Division 293 Tax is payable by high income earners.
A superannuation contribution tax offset is applied to low income earners.