Superannuation Guarantee and rate changes

What is the Superannuation Guarantee?

The Superannuation Guarantee, commonly known as the Super Guarantee or SG for short, is the contribution that’s regularly made into your super fund by your employer. It helps bolster your retirement savings and supplement the Age Pension.

If you’re an employee or contractor and meet the Australian Government’s eligibility criteria, then you’re entitled to receive regular super contributions of at least 12% of your ordinary time earnings (the standard amount you earn for your ordinary hours of work) from your employer.

This contribution is tied in with your salary or remuneration package and is paid on top of your salary, with compliance governed by the Superannuation Guarantee (Administration) Act 1992.

This minimum percentage employers are required to contribute has increased over time, in annual increments of 0.25%-0.5%. These rises started in 2013, when the guarantee rate was 9%. July 1 2025 saw the rate hit 12%, which was the last of these planned series of rises. At the time of writing, the guarantee rate is not set to rise again.

Who is eligible for Super Guarantee contributions?

As an employee, your employer generally has to pay you Super Guarantee contributions, regardless of whether you’re full-time, part-time, or casual. If you’re under 18 or a domestic or private worker (such as a nanny or housekeeper), you must also work more than 30 hours per week to be eligible for Super Guarantee payments.

Employers must pay super to some contractors as well, even if they quote an Australian Business Number (ABN). Temporary residents, such as those on visas, are also typically eligible for Super Guarantee payments.

The Australian Taxation Office (ATO) has an online tool that can help you figure out whether or not you’re entitled to Super Guarantee contributions.

What are the Payday Super laws?

From July 1 2026, your employer must pay your Super Guarantee contributions into your super account on payday, at the same time as your salary or wages. This changes from the old system, where your employer had to make your contributions within 28 days of the end of the quarter.

These new laws don’t require you to do anything as an employee or contractor, but will help grow your super balance, as your contributions will be invested faster. Research from the Australian Government suggests that by switching to payday super, a 25-year-old median income earner currently receiving their super quarterly and wages fortnightly could be around $6,000 or 1.5% better off at retirement. Canstar Research found similar savings of $6,500 at retirement.

← Mobile/tablet users, scroll sideways to view full table →

Source: www.canstar.com.au. Prepared on 07/04/2026. Scenario begins at the start of the 2025-26 financial year and is based on a 25 year old with a starting balance of $26,155, starting gross annual income of $85,948, and retiring at age 67. Employer contributions are assumed to be taxed at 15%. Average life and TPD insurance premium of $174, is assumed charged at the end of each year based on default cover available for a 25 year old on Canstar’s database. Annual income and insurance premiums are assumed to increase with inflation each year. Inflation is assumed to be 2.5% p.a. due to the rising cost of living (CPI Inflation) plus a further 1.5% p.a. due to the rising community living standards. End balances at retirement and total salary sacrifice amounts are shown in “today’s dollars”, i.e. they have been adjusted for inflation. End balances at retirement are also rounded to the nearest $100. Please note all information on income and superannuation performance returns are used for illustration purposes only. Actual returns and the value of your investment may fall as well as rise from year to year; this example does not take such variation into account. Past performance is not a reliable indicator of future performance.

Compare Super Funds

How much super should I be paid?

The Super Guarantee contribution is calculated based on a legislated percentage (currently 12%) of your ordinary time earnings (OTE).

Ordinary time earnings refers to the amount you’re paid for ordinary hours of work (pre-tax), which may include shift loadings, allowances, bonuses, and commissions, but doesn’t include overtime payments.

For example, if your OTE is $80,000 per year, your employer would be required to pay 12% of that amount ($9,600) into your super fund. The ATO has an OTE checklist that shows classifications between salary or wages and ordinary time earnings.

What if my employer doesn’t pay my super on time?

From 1 July 2026, your employer is obligated to pay your Super Guarantee contributions on your payday, at a minimum. It’s important to keep an eye on your superannuation balance, to ensure that your employer is making the correct contributions on your behalf. If they fail to do this, they’ll have to pay what’s known as a Superannuation Guarantee Charge (SGC) to the ATO.

The SGC includes the owed Super Guarantee payment, as well as interest and an administration fee for missing the payment. Any ‘choice liability penalty’ that’s owed, which is a penalty for not giving eligible employees the right to choose their own super fund, may also apply. The SGC will become tax-deductible as part of the new payday super laws.

If you believe your employer is not paying your Super Guarantee correctly, it’s a good idea to contact them directly. If they don’t correct their error or pay the correct amount, you can report unpaid super contributions to the ATO.

Are contractors and self-employed business owners eligible for the Super Guarantee?

The law is that contractors may need to be paid the Super Guarantee if the services they provide are based on an amount of labour, rather than a service based on an outcome. In addition, the work needs to be carried out by the contractor personally rather than by another company, trust, or partnership.

According to the ATO, contractors who are paid mainly for their labour may be considered employees for Super Guarantee purposes, provided that:

• they’re paid under a verbal or written contract that’s predominantly for their labour (more than half the dollar value of the contract is for labour)

• they’re paid for their personal labour and skills such as physical labour, artistry, or mental effort

• they perform the work personally and don’t delegate it.

The ATO offers a handy guide designed to help you decide whether you should be treated as an employee or contractor more generally. If you’re an employer, you can use the ATO’s superannuation guarantee eligibility decision tool to help determine whether you’ll need to pay Super Guarantee contributions for your contractors.

If you run a self-employed business as a sole trader or in a partnership, the ATO says you generally aren’t required to make Super Guarantee payments for yourself. But you may want to make personal contributions to super as a way to help fund your retirement.

What are the Super Guarantee contribution limits?

There’s a cap to how much superannuation employers are required to pay, known as the maximum super contribution base (MSCB). This is indexed in line with average weekly ordinary time earnings, and changes each financial year.

If you earn above the MSCB in a quarter, your employer isn’t obligated to make Super Guarantee contributions for anything you earn above the limit. The current MSCB is around $250,000 for the financial year.

Are Super Guarantee contributions taxed?

Super Guarantee contributions are normally taxed at a concessional contribution rate of 15%. You can also choose to make pre- or post-tax voluntary contributions to your super. Keep in mind that there are caps each financial year for these contributions. If you contribute more than the cap, you may need to pay additional tax.

How does the Super Guarantee work if I have more than one job?

If you have multiple jobs and a Super Guarantee eligibility amount for each, you’re entitled to have your super paid on all of them. The current MSCB for the 2025-26 financial year is $62,500 per quarter. If you’re likely to exceed this cap, you can opt-out of having one or more employers make Super Guarantee contributions, however, you must maintain at least one employer who will make contributions on your behalf.

To opt out of receiving superannuation from an employer, you’ll need to submit a form to the ATO. Once the ATO has received this form, it will issue a Super Guarantee employer shortfall exemption certificate that can be given to your employers so that they’re released from their Super Guarantee obligations.

Compare Super Funds