look for superannuation for casual employees in australia
For most casual employees, whether they are from Australia or not, their default superannuation is the Australian Government Superannuation Scheme. This scheme’s main purpose is to provide for retirees. It consists of three main pillars; and there are a few sub-schemes that can be taken into account.
1. The employer-superannuation contribution (ESC) is compulsory as per Section 239 of the Fair Work Act 2009, and it is paid on employers’ behalf by the employer.
2. The employee-superannuation contribution (ESC) – a compulsory arrangement to cover employee’s future retirement benefits, is provided by the Australian Government and paid into an approved superannuation fund or made directly into a bank account that earns interest, or both
3. The Designated Superannuation Scheme (DSS) is applicable for eligible employees who are on a permanent full-time employment and it is made up of contributions from both the employer and employee. It must meet certain requirements.
The ESC is payable at 9% of the gross salary that applies to all casual employees, who are not part of the DSS. The superannuation guarantee (SG) rate has been bumped up recently and as per 1st July 2012, it increased to 9%. This increase was a significant boost for employees and employer who have not been contributing to superannuation in the past.
The ESC is used as a means of setting up a fund that will earn interest over time, and then once the employee retires, it will be able to provide income for a few decades. However, there is an emergency option where in case of death or severe sickness where the fund can be utilized earlier than expected. The government’s superannuation scheme consists of many sub-schemes like:
1. ‘Employee contributions’ pays towards the employer superannuation contribution
2. ‘Company superannuation contributions’ is restricted to businesses with a yearly turnover of less than $3 million, so as to not contribute towards company benefits
3. ‘Employer contributions’ where it’s meant for employees who work for small sized companies in Australia
4. ‘Government co-contribution’ for low income employees
The term ‘low income’ refers to individuals whose taxable income doesn’t exceed $36,021 a year. The government co-contribution will pay up to $500 into the employee’s super fund account. It must be noted that the ESC works as a percentage of the gross salary where a contribution at 9% is made towards superannuation.