Superannuation Guarantee for Employers

SG rate and employee eligibility

The SG rate is 12% of ordinary time earnings from 1 July 2025, continuing unchanged into 2026-27 and beyond (no further increases are legislated). All employees are generally entitled to SG: full-time, part-time, and casual staff from the first dollar. The former monthly earnings threshold was removed from 1 July 2022. The sole exception is under-18 workers who work 30 hours or fewer per week. Employers must apply the 12% rate to each eligible worker's OTE for payments made on or after 1 July 2025, even if the pay period overlaps June.

Ordinary time earnings (OTE)

SG is calculated on OTE, the amount paid for ordinary hours of work. OTE includes base salary and wages, paid annual, sick and other leave that forms part of ordinary hours, commissions and sales incentives tied to ordinary work, shift loadings, and most allowances (not strictly overtime). Excluded from OTE: overtime payments, genuine expense reimbursements (travel, tools), some termination and redundancy payments, and certain discretionary non-work-related bonuses.

Quarterly due dates (2025-26)

SG must be paid at least quarterly. Employers may pay more frequently (monthly or fortnightly) as long as each quarter is fully paid by the due date. Q4 2025-26 is the last quarterly payment before Payday Super takes effect.

Maximum contribution base

Employers are only obligated to pay SG up to the quarterly maximum contribution base. For 2025-26, the MCB is $62,500 per quarter, meaning the maximum compulsory SG is $7,500 per quarter ($30,000 per year). From 2026-27, the MCB moves to an annual cap of $270,830, with maximum compulsory SG of approximately $32,500 per year.

Super Guarantee Charge (SGC)

If SG is not paid by the due date, the employer must lodge an SGC statement and pay the SGC to the ATO. The SGC is punitive by design: it is calculated on total salary and wages (including overtime, not just OTE), includes 10% per annum nominal interest accruing from the first day of the relevant quarter, and adds a $20 administration fee per employee per quarter. The entire SGC is not tax deductible. Failing to lodge SGC statements can attract further Part 7 penalties of up to 200% of the SGC amount.

Choice of fund and stapled super funds

Employers must offer eligible new employees a choice of super fund. If the employee does not choose, the employer must request the worker's stapled super fund from the ATO (the existing fund that follows the employee between jobs). Only if there is no stapled fund and no valid choice does the employer pay into its nominated default fund, which must be MySuper-authorised.

Contractors and director obligations

Some independent contractors are treated as employees for SG purposes under SGAA 1992 section 12(3) if they work under a contract wholly or principally for their labour. SG is required at 12% on the contractor's OTE equivalent, up to the MCB, even if the contractor quotes an ABN. SG is an additional employer cost that cannot be offset from the contractor's invoice. Company directors who earn salary or wages are generally entitled to SG like other employees. If a company fails to meet super obligations, the ATO's director penalty regime can make directors personally liable for unpaid SGC and related tax debts.

Payday Super (from 1 July 2026)

From 1 July 2026, Payday Super replaces the quarterly deadline system entirely. Employers must pay SG at the same time as salary and wages, with contributions reaching the employee's fund within 7 business days of payday. The MCB moves from a quarterly cap to an annual cap of $270,830. The SG rate remains 12%. Employers should prepare by ensuring payroll systems can process super contributions alongside each pay run, testing integration with their clearing house or SuperStream channel, and reviewing cash flow to accommodate more frequent super payments.

Statute references

• Superannuation Guarantee (Administration) Act 1992 (SGAA) (SG framework)
• SGAA 1992 s 19 (SG charge percentage schedule)
• SGAA 1992 s 12(3) (contractors treated as employees for SG purposes)
• SGAA 1992 Part 7 (Super Guarantee Charge, penalties)
• ATO Super Guarantee guide (employer obligations)
• ATO SuperStream guidance (electronic contribution standards)
• ATO stapled super fund guidance (choice of fund process)
• Treasury Laws Amendment (Payday Super) (from 1 July 2026)
• Superannuation Guarantee (Administration) Act 1992 (SGAA) ss 19, 23 (SG rate: 12% from 1 July 2025)
• SGAA s 15 (maximum super contribution base — FY 2025-26: $62,500 per quarter; maximum SG payable per employee per quarter at 12% = $7,500. Indexed annually against AWOTE.)
• SGAA s 32C and Schedule 1 (choice of fund and stapling — default stapled fund applies from 1 November 2021)
• SGAA s 23 (quarterly SG due 28 days after quarter end; transitions to Payday Super each pay cycle from 1 July 2026)
• SGAA ss 17–22 (Superannuation Guarantee charge for late or unpaid SG — not tax-deductible per ITAA 1997 s 26-95)
• Superannuation Industry (Supervision) Act 1993 (SISA) — fund regulation framework cross-referenced by SGAA

Frequently asked questions