Why Casual Workers Are Entitled to Super
Written by Bindi Gethen
There’s a lot of confusion that comes with the unstable hours of casual work. Savings, finances, retirement funds – there are a lot of financial factors that are often overlooked.
So do casual employees get super? Yes, casual employees should have a superannuation fund. If you’re over 18 and earning more than $450 before tax in a month from a single employer, they’re supposed to be contributing to your super, no matter if you’re part-time, full-time, or casual. But even if you’re under 18, the same applies as long as you work more than 30 hours in a week.
Some casual workers end up with multiple super accounts if they juggle different jobs, which can lead to paying more fees than necessary. There are ways to consolidate those accounts to avoid the extra charges.
Keeping an eye on super contributions can make a big difference down the track, especially when it comes to retirement savings. You need to know your rights and make sure you’re getting what you’re entitled to.
Do part-time and casual employees get super?
Part-time and casual employees do get superannuation contributions from their employers.
If you’re over 18 and earning more than $450 before tax in a month from a single employer, they’re required to make super contributions on your behalf. This is part of what’s called the Superannuation Guarantee, and the current rate is 10.5% of your earnings.
Even if you’re under 18, you’re still entitled to super contributions if you work more than 30 hours in a week, alongside earning over $450 before tax in a month. This applies regardless of whether you’re a part-time, casual, or full-time employee.
Related articles:
How to Apply for a Tax File Number – Australia
Pro tip
If you're working and meeting the aforementioned conditions, you should be seeing some super contributions going into your chosen super fund. It's a neat way to start saving up for retirement, even if it feels like a million years away right now.
How superannuation contributions are calculated
The rules around superannuation guarantee (SG) contributions apply to most employees in Australia, including those working part-time and casual roles, but there are some nuances that are particularly relevant to these types of employment.
Compulsory Employer Contributions
For part-time and casual employees, superannuation contributions are calculated based on the same principles as for full-time employees, but with considerations for their often-variable earnings:
Contribution Rate
The 1 July 2022 – 30 June 2023 minimum SG contribution rate is 10.5% of an employee’s ordinary time earnings (OTE). This rate applies to all employees, regardless of whether they’re full-time, part-time, or casual.
Ordinary Time Earnings (OTE)
OTE typically includes what you earn for your ordinary hours of work, including over-award payments, certain bonuses, allowances, and commissions, but not overtime payments. For part-time and casual employees, who may have fluctuating hours and earnings, OTE will vary each pay period.
Earnings Threshold
Employers are required to make super contributions for employees earning $450 or more before tax in a calendar month. This threshold applies on a per-employer basis, meaning if a casual or part-time employee works multiple jobs, they could potentially receive super contributions from each job if they meet this threshold with each employer.
Calculating Contributions
To calculate the superannuation contribution for a part-time or casual employee:
- Determine the employee’s OTE for the pay period.
- Ensure the employee meets the $450 per month earnings threshold with that employer.
- Apply the current SG contribution rate (e.g., 10.5%) to the OTE.
Example Calculation
If a casual employee earns $1,000 in OTE in a month from one employer, the super contribution would be calculated as $1,000 x 10.5% = $105 for that month from that employer.
Pro tip
Rates are set to increase annually.
1 July 2023 – 30 June 2024, SG will be 11%.
1 July 2024 – 30 June 2025, SG will be 11.5%.
1 July 2025 – 30 June 2026 and onwards, SG will be 12%.
Voluntary Contributions
In addition to compulsory contributions, part-time and casual employees can make voluntary contributions to their super, either before-tax (concessional) or after-tax (non-concessional). These contributions are subject to caps and can be a way to boost retirement savings, especially in cases where irregular hours might lead to lower compulsory contributions.
Pro tip
Employers must provide payslips that detail the amount of super contributions and the fund they are paid into. It’s crucial for part-time and casual employees to check these details due to their varying hours and earnings.
Main factors to consider when choosing a super fund
1. Performance
This refers to how well the super fund’s investments have performed over time.
While past performance is not a reliable indicator of future performance, it can give you an idea of how well the fund manages its investments. For part-time and casual workers, finding a fund that consistently performs well is crucial, as you might be contributing less into your super compared to full-time workers, making every dollar in performance gains more valuable.
Related articles:
Where Does the Tax Money of Australian Citizens Go To?
Do You Get Taxed More on a Second Job in Australia?
Tax Hacks for Tradies: Keep More of Your Hard-Earned Money
What Happens if You Haven’t Paid Taxes in 3 Years? | Australia
2. Fees
All super funds charge fees, but the amount and type of fee can vary significantly from one fund to another. Fees can eat into your retirement savings, so it’s important to look for a fund with low fees. Even small differences in fees can make a big difference to your super balance over the long term.
3. Investment options
Super funds offer a range of investment options, from conservative (lower risk and lower potential returns) to aggressive (higher risk and higher potential returns).
As a part-time or casual worker, your choice might depend on your financial goals, risk tolerance, and the time you have until retirement.
Pro tip
You might prefer a more aggressive investment option if you're younger and have more time to ride out market volatility or a more conservative option if you're closer to retirement.
4. Insurance
Many super funds provide life, total and permanent disability (TPD), and income protection insurance. The level of coverage and the cost of insurance premiums will vary.
For part-time and casual workers, it’s important to assess whether the insurance offered is suitable for your needs and whether you’re paying for unnecessary cover. Given that part-time and casual employment may not offer the same job security as full-time employment, having appropriate insurance through your super can provide an important safety net.
5. Service
This includes the customer service provided by the super fund, such as the ease of accessing your account information, the quality of financial advice offered, and the fund’s responsiveness to inquiries. Good service can make managing your super easier and more effective, especially for part-time and casual workers who might need more guidance to maximise their super contributions and benefits.
Related articles:
Let’s Talk Business: Minimum Wage Increases in Australia
How Bookkeeping Services Save Your Life During Tax Season
Frequently Asked Questions
You can check if your employer is making super payments by looking at your pay slip, which should list the amount of super being contributed. Additionally, you can check your superannuation account directly by logging into your account online or contacting your super fund.
Superannuation contributions from your employer should be made at least quarterly. If you notice any discrepancies or if contributions are not being made, you may need to speak with your employer or seek advice from the Australian Taxation Office (ATO) or The Bookkeeping Studio.
If you don’t choose a super fund when you start a new job, your employer will pay your super contributions into a default fund they’ve chosen. This default fund must offer a MySuper option, which is a simple and low-cost superannuation product.
While MySuper accounts can be a good option for many people, it’s important to consider whether the default fund suits your needs, as different funds offer different benefits, fees, and investment options. You can switch to a different fund at any time if you find one that better suits your financial goals and circumstances.
Yes, superannuation offers significant tax benefits designed to encourage Australians to save for their retirement. Contributions made by your employer and any salary-sacrificed contributions are taxed at a concessional rate of 15%, which is lower than most people’s marginal tax rates.
Investment earnings within the super fund are taxed at a maximum rate of 15%, and the tax treatment of superannuation benefits is also favourable when accessed as a retirement income stream. These tax advantages make superannuation one of the most tax-effective ways to save for retirement.
Absolutely! There are two types of contributions you can make: concessional (before-tax) contributions and non-concessional (after-tax) contributions. Concessional contributions include employer contributions and any amounts you contribute before tax, such as salary sacrificing. There are annual caps on how much you can contribute at these concessional tax rates.
Non-concessional contributions are made from after-tax income. There’s also a cap on how much you can contribute annually. Making extra contributions can be a powerful way to increase your super balance, taking advantage of the compound interest over time and the tax benefits superannuation offers.
Achieve your personal finance goals faster with The Bookkeeping Studio in Australia
Superannuation savings benefit from the principle of compounding interest over time. This means the earlier and more consistently someone contributes to their super, the more they benefit from accumulated earnings over time. For part-time and casual workers, even small, regular contributions can grow significantly by the time you retire, helping you build a substantial retirement nest egg.
If there’s one thing we’re sure of: Your financial goals are within reach. We’d love to help you achieve them. Whether you’re aiming for financial security, planning for retirement, or looking to maximise your superannuation, The Bookkeeping Studio is with you every step of the way. Feel free to contact us, give us a call, or drop by our offices in Australia.
Hey, my name’s Bindi Gethen! I’m the founder of The Bookkeeping Studio in Australia. With over 15 years of experience in the industry, I have a deep understanding of the challenges that small and medium-sized business owners face when it comes to managing their finances.
I am passionate about empowering my clients with the financial information they need to succeed. My team and I pride ourselves on our commitment to exceptional value, accuracy, and confidentiality. Our virtual bookkeeping services include payroll, budgets, and management reporting, among others.
Not to toot our own horn, but we can assure you that you won’t find a bookkeeping partner like us anywhere else in the Southern Highlands.
