How to calculate your super from your employer

Calculating how much your employer should be paying into your super fund is a relatively easy task. But the tricky bit is working out what part of your earnings is used in the calculations. We take a look.

The minimum amount of money your employer should pay into your super fund is 10% of your ordinary time earnings (OTE).

But there are two things that you need to work out before you can apply that calculation:

1. if you’re eligible to receive the payments
2. what counts as your OTE.

Am I eligible to be paid super?

To be eligible to be paid super, the Australian Taxation Office (ATO) says you should be an employee aged 18 or over and getting paid $450 or more (before tax) in a month. That pay threshold is being scrapped from 1 July, 2022. If you’re under 18, you may be eligible if you also work more than 30 hours a week.

Learn more: Superannuation Guarantee and super for casual employees and workers aged under 18.

What is my package?

When you are offered a job your employer should explain how you will be paid. This should include details of any superannuation payment you may be entitled to get from your employer.

• Generally, if you get a wage this will usually be paid for a fixed rate, such as per hour, per day or per week. Fair Work Australia says your employer must comply with any minimum wage requirements, which can vary depending on the job, your age and ability.
• If you’re on a salary this will usually be an annual amount you can expect to be paid in a given year. Again, Fair Work Australia says there are minimum entitlements that apply.
• Other methods of payment include piece-time work where you are paid for the hours it takes you to complete a specified task.

In all cases though you should get clear advice on what your total pay package or salary package will be, and any extra entitlements such as overtime or leave. Your employer should specify super entitlement, based on your ordinary time earnings (OTE). If it’s not clear, you should ask your employer.

What are my ordinary time earnings (OTE)?

Your OTE is the amount you’re paid for your ordinary hours of work, including things like commissions and shift loadings.

There are a number of extras that may be added to your OTE as well as things that may be excluded.

For example, the ATO says if your ordinary hours of work are set down in an award or an agreement, then any overtime you’re paid will not be counted towards your OTE.

If your ordinary hours are not stated in an award or agreement then any overtime paid may be included in your OTE.

If your overtime can’t be clearly identified, then industry super fund UniSuper says all the hours you work should be considered as OTE.

Similarly, if you’re employed as a casual or working for piece-rates and it’s difficult to define what your ordinary hours work are, then the ATO says your employer should use the actual hours you worked to calculate its super contribution.

Other items that the ATO says should be included in your OTE include:

• annual, sick and long service leave
• annual leave loading (unless it’s linked to lost overtime, see the ATO’s explanation for more details)
• termination payments – in lieu of notice
• performance and Christmas bonuses.

Any expenses paid to you are generally not included in your OTE, but some allowances are included such as a dangerous-site allowance or an on-call allowance for doctors.

Your employer should pay its super contribution directly to your super fund at least once a quarter, although it may opt to pay more frequently. It’s a good idea to keep a check on those payments, making sure that the amount listed on your payslip matches up to what is deposited into your super fund.

Read more: How to check how much you should be getting paid

Calculate: how much super my employer should pay

Once you know how much you are paid for your OTE, it’s a simple calculation to work out what your employer should be paying into your super fund.

Say, for example, your OTE earnings are about $60,000 a year, which is about $15,000 a quarter. That means your employer should be paying an amount equal to 10% of your earnings into your super fund at least once every quarter.

10% of $15,000 is (10/100) × 15,000 = 0.1 × 15,000 = $1,500

Your employer should be paying at least $1,500 into your super fund every quarter.

The super contribution figure is scheduled to rise each year until it reaches 12% in 2025. From 1 July 2022 the super contribution will rise to 10.5%, so the calculation will change to:

10.5% of $15,000 is (10.5/100) × 15,000 = 0.105 × 15,000 = $1,575

Your employer could choose to pay you more than the minimum super contribution. For example, the ATO offers employees a super contribution of 15.4%.

There is a cap on how much your employer is expected to pay into your super fund, known as the maximum super contribution base. If you’re lucky enough to earn more than the cap, your employer only has to pay super on the amount you earn up to that cap limit.

Read more: What is salary sacrificing and how does it work?

For the 2021-22 income year that cap is $58,920 a quarter (or $235,680 a year) . The figure is index linked to Average Weekly Ordinary Time Earnings (AWOTE) and usually adjusted each February.

In case you’re wondering, the average weekly ordinary time earnings for full-time adults was $1,748 in November 2021, according to the Australian Bureau of Statistics. That’s about $22,724 a quarter (or $90,896 a year).

If you have any concerns about how much is being paid to your super fund you should first discuss that with your employer. If you’re still not happy then you can raise the matter with the ATO.

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