Superannuation Guarantee (Australia)
The mandatory employer contribution to an employee's superannuation (retirement) fund in Australia, currently set at 11.5% of ordinary time earnings, with quarterly payment deadlines and a Superannuation Guarantee Charge (SGC) penalty for late or unpaid contributions.
- What Is the Superannuation Guarantee?
- SG Rate Schedule: Past, Present, and Future
- Ordinary Time Earnings (OTE): What's Included
- Quarterly Payment Deadlines and the SGC
- Choice of Fund and Stapled Super
- Salary Sacrifice and SG Interaction
- ATO Enforcement and Compliance
- Superannuation Guarantee Statistics [2026]
- Frequently Asked Questions About the Superannuation Guarantee
What Is the Superannuation Guarantee?
Key Takeaways
- ✓The Superannuation Guarantee (SG) requires Australian employers to contribute a minimum percentage of each eligible employee's ordinary time earnings (OTE) into a complying superannuation fund.
- ✓The SG rate is 11.5% of OTE for 2024-25, increasing to 12% from July 1, 2025. This rate has been incrementally increasing since the SG was introduced at 3% in 1992.
- ✓Since July 1, 2022, all employees are eligible for SG regardless of how much they earn. The previous $450/month minimum earnings threshold was removed.
- ✓Employers must pay SG contributions quarterly, with the contribution received by the super fund by the 28th of the month following each quarter (October 28, January 28, April 28, July 28).
- ✓Employers who miss the quarterly deadline or pay less than the required amount face the Superannuation Guarantee Charge (SGC), which includes the shortfall amount, a nominal interest component (currently 10%), and a $20 per employee per quarter administration fee.
Australia's Superannuation Guarantee is one of the most significant employer payroll obligations in the country. It's the mechanism that builds the country's $3.4 trillion superannuation pool, funding retirement for millions of Australians. The SG isn't optional. It isn't an employee benefit that employers choose to offer. It's a legal obligation under the Superannuation Guarantee (Administration) Act 1992, enforced by the Australian Taxation Office (ATO). Employers who don't pay on time don't just face penalties. They lose the tax deduction for the contribution, pay interest on the shortfall, and incur an administration charge per employee per quarter. For HR and payroll teams, the key challenge is calculating OTE correctly (it's not the same as gross pay), paying the right fund (employees choose their own fund via a "choice of fund" form or stapled super fund), and meeting the quarterly deadlines. The ATO has significantly increased its enforcement of SG compliance since 2019, including real-time data matching through Single Touch Payroll (STP).
SG Rate Schedule: Past, Present, and Future
The SG rate has been gradually increasing since 1992 and is on a legislated path to 12%.
| Period | SG Rate |
|---|---|
| July 1992 - June 1993 | 3% (initial introduction) |
| July 2002 - June 2013 | 9% (held for 11 years) |
| July 2013 - June 2014 | 9.25% |
| July 2014 - June 2021 | 9.5% (frozen during policy debates) |
| July 2021 - June 2022 | 10% |
| July 2022 - June 2023 | 10.5% |
| July 2023 - June 2024 | 11% |
| July 2024 - June 2025 | 11.5% |
| July 2025 onward | 12% (legislated final rate) |
Ordinary Time Earnings (OTE): What's Included
The SG is calculated on Ordinary Time Earnings, not gross pay. Understanding the difference is critical for accurate calculation.
Included in OTE
Base salary, regular allowances (shift loading, site allowance, first aid allowance), commissions, bonuses related to ordinary hours of work, paid leave (annual, personal/sick, long service), work-related allowances that are part of the ordinary earnings arrangement (tool allowance, car allowance if part of salary package). The ATO uses the principle: "Would the employee receive this payment for performing their ordinary hours of work?" If yes, it's OTE.
Excluded from OTE
Overtime payments (the most significant exclusion), reimbursement of expenses, workers' compensation payments, redundancy pay (genuine redundancy), salary sacrificed amounts (these have their own SG treatment), lump sum payments in lieu of notice (in most cases), and payments for unused sick leave on termination. Overtime is excluded because SG was designed to cover ordinary working arrangements, not additional hours. This exclusion can create confusion for employees who work regular overtime and expect SG on all their earnings.
SG calculation example
Employee earns: Base salary $5,000/month + Shift loading $500/month + Overtime $800/month + Car allowance (reimbursement) $200/month. OTE = $5,000 + $500 = $5,500 (overtime excluded, car allowance excluded as reimbursement). SG = $5,500 x 11.5% = $632.50 per month. Quarterly SG = $632.50 x 3 = $1,897.50 (must be received by the fund by the 28th of the month after quarter end).
Quarterly Payment Deadlines and the SGC
Missing an SG deadline is one of the most expensive payroll mistakes in Australian employment law.
The Superannuation Guarantee Charge (SGC)
If SG contributions aren't received by the fund by the deadline, the employer must lodge an SGC statement and pay the Superannuation Guarantee Charge. The SGC consists of three parts: (1) the SG shortfall amount, calculated on the employee's salary and wages (not just OTE, which means the base for SGC is higher than for SG), (2) nominal interest at 10% per annum on the shortfall from the start of the quarter, and (3) a $20 per employee per quarter administration fee. Additionally, the employer loses the tax deduction for the SG amount. A contribution paid on time is tax-deductible. An SGC payment is not. This double penalty makes late SG extremely expensive.
What 'received by the fund' means
The deadline is when the super fund receives the payment, not when the employer initiates it. If the employer makes a bank transfer on October 27 but the fund doesn't receive cleared funds until October 30, the SG is late and the SGC applies. Most clearing houses take 3 to 7 business days to process and distribute payments to funds. Employers should submit SG payments at least 7 to 10 business days before the deadline to ensure receipt. Using a SuperStream-compliant clearing house (required by law) adds processing time that must be factored in.
| Quarter | Period | Deadline (contribution must be RECEIVED by fund) |
|---|---|---|
| Q1 | July 1 - September 30 | October 28 |
| Q2 | October 1 - December 31 | January 28 |
| Q3 | January 1 - March 31 | April 28 |
| Q4 | April 1 - June 30 | July 28 |
Choice of Fund and Stapled Super
Employees have the right to choose which super fund receives their SG contributions. If they don't choose, the employer must check for a "stapled super fund."
Employee choice of fund
Under the Superannuation Guarantee (Administration) Act, eligible employees can nominate any complying super fund or retirement savings account to receive their SG contributions. The employer must provide a "Choice of Fund" form (or equivalent) within 28 days of the employee's start date. If the employee nominates a fund, the employer must pay SG into that fund. The employee can change their nominated fund at any time, and the employer must process the change from the next practical quarter.
Stapled super fund (default since November 2021)
If a new employee doesn't choose a fund, the employer must check with the ATO for a "stapled super fund." A stapled fund is an existing super fund that's linked to the employee from a previous job. The ATO introduced stapling to reduce the proliferation of duplicate super accounts (previously, employees would get a new default fund with every new job, fragmenting their savings and paying multiple sets of fees). The employer checks for a stapled fund through ATO Online Services for Business or their payroll software. If a stapled fund exists, SG goes there. If no stapled fund is found, the employer uses their default fund (which must be a MySuper product).
Salary Sacrifice and SG Interaction
Salary sacrifice arrangements interact with SG in specific ways that employers must understand to avoid underpayment.
SG on salary sacrifice amounts
If an employee salary sacrifices part of their pay into super, the employer can count those salary sacrifice amounts toward the SG obligation only if the employment agreement, award, or enterprise agreement permits it. Under most modern awards, salary sacrifice amounts cannot be counted toward SG. The employer must pay SG on the pre-sacrifice salary amount. Example: Employee's OTE is $80,000. They salary sacrifice $10,000 into super. Cash salary is $70,000. SG must be calculated on $80,000 (pre-sacrifice OTE) = $9,200 (at 11.5%). The $10,000 salary sacrifice is an additional super contribution on top of SG, not a substitute.
ATO Enforcement and Compliance
The ATO has significantly increased SG enforcement since 2019, using Single Touch Payroll (STP) data to identify non-compliant employers in near real-time.
- Single Touch Payroll (STP) Phase 2 requires employers to report super liability information with each payroll run. The ATO matches reported liability against actual fund receipts to identify gaps.
- Employees can report unpaid super directly to the ATO through the "Report unpaid super" form on ato.gov.au. The ATO investigates and can audit the employer's entire SG history.
- The ATO can issue Director Penalty Notices (DPNs) to company directors personally for unpaid SGC. Directors become personally liable for the SGC amount plus penalties if they don't respond within 21 days.
- In 2022-23, the ATO raised $1.1 billion in SG-related liabilities from non-compliant employers (ATO Annual Report, 2023). Over 25,000 employers were contacted about SG shortfalls.
- The ATO offers a Superannuation Guarantee Amnesty (which ended in September 2020) and ongoing voluntary disclosure programs. Employers who self-report SG shortfalls before an ATO audit typically receive reduced penalties.
- From July 2026, the government plans to require employers to pay SG on payday (aligning with salary payments) rather than quarterly. This "payday super" reform will reduce the window for non-payment and simplify compliance.
Superannuation Guarantee Statistics [2026]
Key data about Australia's superannuation system and SG compliance.
Frequently Asked Questions
Do all employees get superannuation?
Is SG payable on overtime?
What happens if an employer goes bankrupt with unpaid SG?
Can an employer pay more than the SG minimum?
How does SG work for employees with multiple employers?
What is 'payday super' and when does it start?
Written by Adithyan RK