There's a payroll trap sitting inside Xero that catches employers with under-18 staff. Super isn't calculated for these employees by default, and Xero won't flag the moment they cross the threshold that turns super back on

The rule most employers don't know

Under section 28 of the Superannuation Guarantee (Administration) Act 1992 and the test set out in ATO Superannuation Guarantee Determination SGD 93/1, employers must pay Super Guarantee (SG) contributions for an employee under 18 only if they work more than 30 hours in a single week. Less than 30 hours, no super for that week. More than 30 hours, super applies on their ordinary time earnings for that week

The test is weekly, not averaged. A 17-year-old casual could work 28 hours one week (no super due) and 35 hours the next (super due on the full week's OTE). The clock resets every week, and you can't blend hours across a fortnightly or monthly pay period to get under the line

What Xero does, and what it doesn't

When you set up an under-18 employee in Xero payroll, the system doesn't add a super line to their pay template by default. That's defensible logic. Most weeks, the average school-aged casual won't cross 30 hours

The gap is what happens when they do. If a teenage employee works 32 hours in a week, Xero processes the pay run as normal. No alert. No prompt. No automatic super calculation. The employee is silently underpaid super, and nobody knows until someone runs an audit

How expensive the gap gets

The penalty for missed super is the Super Guarantee Charge (SGC). It's structurally harsher than just paying the super late. The SGC includes the super shortfall itself (calculated on salary and wages, not just OTE), plus 10% nominal interest accruing from the start of the quarter, plus a $20 administration fee per employee per quarter. The entire SGC is not tax-deductible

So a missed contribution of $100 doesn't cost $100 to fix. It costs the shortfall plus interest plus admin fee, and you lose the deduction. Miss a handful of weeks across a handful of under-18 employees and the compounding bill isn't small

The risk concentrates in industries where under-18s work variable hours: retail, fast food, hospitality, pharmacy, and trades apprentices. School holidays are the obvious flashpoint. The kid who normally does 12 hours after school suddenly picks up four shifts and tips over 30 hours. If nobody's watching, super gets missed

Three workarounds we use

Three ways to plug this gap in our client files

The first is manual checking at every pay run. Filter timesheets by birth date, find any under-18 employees, and check whether they crossed 30 hours that week. If they did, add a one-off super line to the pay run. Works only if the discipline holds. Miss one pay run and you've made the problem

The second is a Xero report as a pre-pay-run checklist. The Payroll Activity Details report can be filtered to show hours by employee. Some firms run it every Friday before the Monday pay run

The third, and the cleanest, is to switch on super by default for any under-18 employee whose work pattern sits near 30 hours regularly. Yes, you'll pay some super on weeks where it wasn't strictly required. The cost of that small overpayment is tiny compared to the cost of an SGC investigation, and the employee's super balance benefits anyway

Why this matters more right now

On 31 March 2026, the Fair Work Commission ruled to phase out junior pay rates for employees aged 18 to 20 in the Retail, Fast Food, and Pharmacy awards, starting 1 December 2026. Rates for employees under 18 don't change under this ruling

But there's a second-order effect worth paying attention to. As the cost of employing an 18-to-20 year old rises toward the full adult rate over the next four years, the relative cost of an under-18 casual on the unchanged junior rate drops. Some employers will quietly rebalance rosters - more hours for under-18 staff who remain on discounted junior rates, fewer hours for the young adults whose pay is rising

That's the connection to super. More hours for teenage casuals means more weeks where they cross the 30-hour line, which means more weeks where super should have been paid. If you haven't audited your under-18 employees' hours recently, now is the moment

What to do this week

Pull a list of every under-18 employee in your Xero file. Check their birth date is correct. Run the Payroll Activity Details report for the last quarter and look for any week where they worked more than 30 hours. If you find any, that's a missed super contribution and a back-payment

The 30-hour rule isn't new. From 1 July 2026, Payday Super changes the payment frequency but not the eligibility rules. The under-18, more-than-30-hours test keeps applying, and when it triggers, contributions must reach the fund within 7 business days of each payday

The rule is quiet. The penalties aren't

Current as at April 2026 per Australian Taxation Office and Fair Work Commission