Australia - Superannuation Guarantee Scheme

Australia - Superannuation Guarantee Scheme

Australia's Superannuation Guarantee Scheme requires employers to provide a minimum level of superannuation support for each employee, subject to limited exceptions.  The Employer Superannuation Guarantee Contributions (ESGC) may be paid into any Australian complying superannuation fund for the benefit of the employee.  The current required percentage is 9.5 percent of the employee's notional base earnings (subject to an annual cap).

Accordingly, employers are generally required to make ESGC payments to a complying superannuation fund in respect of expatriate employees who are residing and working in Australia.  There are limited exceptions with regards to expatriate employees, whereby an employer is not required to make ESGC in respect of the following main ''exempt' employees: -

  • Foreign senior executives residing in Australia who hold certain visas or entry permits as prescribed by the Superannuation Regulations.  This exemption would normally apply to an expatriate employee who is in the top 3 levels of the company
  • Employees working temporarily in Australia that are paid a salary and wages where there is a scheduled international social security agreement in place which provides that the employer is not subject to the ESGC in respect of work for which the payment is made.  Australia currently has international social security agreements with 13 countries,  These are detailed below and as such these expatriate employees from these countries are exempt employees for Australian ESGC purposes where a Certificate of Coverage has been obtained in the expatriate's home country.

 

Currently Australia has agreements with:-

Country

Commencement date

Switzerland

1 January 2008

Norway

1 January 2007

Ireland

1 January 2006

Belgium

1 July 2005

Croatia

1 July 2004

Chile

1 July 2004

Netherlands

1 April 2003

Portugal

1 October 2002

United States of America

1 October 2002

Korea

1 October 2008

Germany

1 October 2008

Greece

1 October 2008

Japan

Due 1 January 2009

 

Please note that the German agreement came into effect from 1 October 2008 and only applies in respect of superannuation post 1 October 2008.

 

Expatriates Ability to Access Accumulated Superannuation Benefits if they depart Australia - Post 18 December 2008.

Expatriate employees are able to claim their superannuation benefits upon permanent departure from Australia.  Legislation has recently been introduced which provides that expatriate employees must claim their superannuation benefits from their complying superannuation fund within six months of permanently departing Australia and having their temporary visas expire or be cancelled.  Under legislation , when the expatriate employee claims their refund, withholding tax of 35 per cent will apply.

The ATO (Australian Taxation Office) is able to identify expatriates who have departed Australia by matching contribution information with DIBP (Department of Immigration & order Protection).  Please note however that the cancellation of the visa and notification to DIBP could take several months.

Why Visa Executive

At Visa Executive, we provide our clients with:

  • An efficient and transparent service
  • One point of contact for both the client and employee throughout the whole visa process
  • A unique on-line system that enables clients to track the progress of applications
  • A flat structured fee for each visa category
  • Updates on frequently changing immigration laws
Complete an online initiation form

Subscribe to Newsletter

Subscribe to our newsletter and stay up to date with the latest developments.

Subscribe