Super when an employee dies¶

When an employee passes away, there are caring and practical steps to take. One of them is finishing their pay correctly. The employer still owes super for the work the employee did, and that super needs to be paid.

This lesson keeps things simple and respectful. It separates the part that is the employer's job from the part that belongs to the employee's super fund.

In one line

You pay any super still owing for the work the employee did and keep records. The super already in their fund is paid out by the fund as a death benefit — that part is not the employer's job.

Why this matters¶

Losing an employee is hard, and it is easy to feel unsure about what to do next with their pay. Knowing your obligation up front means the employee's family or estate are not left waiting, and your records stay in order. It also helps you avoid missing a super payment that is still due.

What you will learn¶

What the employer's super duty is when an employee dies
What happens to the super already held in the employee's fund
Which parts are the employer's job and which belong to the fund

Understanding the concept¶

Your super duty runs up to the work the employee actually did. The ATO explains that you still need to pay super for the employee's ordinary time earnings — the pay they earned for their ordinary hours — up to when they died. This is the same super you would have paid if they were still working.

There is a final pay to sort out too. This can include unpaid salary or wages, allowances and any bonuses. The ATO explains that these amounts are paid to the employee's legal personal representative — this is the person handling the estate, such as the executor named in a will. Super owing can be paid to the employee's super fund, or to the legal personal representative.

The super that is already sitting in the fund is different. Once someone dies, the money in their super fund becomes a death benefit. The ATO explains that the fund pays this out to the person's beneficiaries or to their estate. That process is handled by the fund, not by you as the employer. Your job is to make sure any super you still owe reaches the fund (or the legal personal representative), and to keep clear records.

For accountants & bookkeepers

The ATO notes that where super guarantee is paid to the legal personal representative, it is treated as though it was paid to a complying fund. The employer remains liable for the super guarantee charge if the minimum super is not paid to the right place by the due date, so the death of an employee does not pause the due-date rules. The ATO also advises that amounts such as unused annual leave or unused long service leave paid after death are generally not subject to PAYG withholding — confirm the current treatment on the ATO's deceased-employee page.

Example¶

A small business has an employee who passes away partway through a quarter. The employer works out the super owing on the ordinary time earnings for the work the employee did up to that point, and pays it by the due date — to the employee's super fund, keeping the receipt.

The final pay, covering unpaid wages and any leave owing, is arranged with the person handling the estate. The super already held in the employee's fund is not something the employer touches: the fund deals with that as a death benefit, paying it to the beneficiaries or the estate. The employer keeps a copy of the super payment records on file.

Common mistakes¶

Assuming super stops the moment an employee dies — super is still owed for the work they did up to that point.
Trying to pay out the super already in the fund — that is a death benefit handled by the fund, not the employer.
Missing the usual super due date — the due-date rules still apply, so pay on time.
Not keeping the payment records — records still need to be kept.

How this works in myaccountant¶

In the app — you can finalise the employee's final pay and pay any outstanding super the same way you would for any other pay, and myaccountant keeps a record of the contribution and payslip. The death benefit itself is not part of payroll — that is paid out by the super fund, so there is nothing to process for it in the app.

Key points¶

The employer still pays super owing on the work the employee did.
Super owing can go to the fund or to the legal personal representative.
The usual super due dates still apply.
Super already in the fund becomes a death benefit paid out by the fund.
The death benefit is the fund's job, not the employer's.
Keep records of the super you paid.

Learn next¶

General information only — not tax, super or financial advice.

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