Super basics for employees and employers
Superannuation is one of the biggest costs of employing people and one of the biggest assets most employees will ever have. Here’s what both sides need to know.
For employers
The rate
Employers must pay the superannuation guarantee (SG) of 12% of each eligible employee’s ordinary time earnings. That’s the rate that has applied since 1 July 2025.
Ordinary time earnings are generally what an employee earns for their ordinary hours: wages, commissions, shift loadings and most allowances. Overtime is usually excluded. Super is only required up to the maximum super contribution base each quarter, which affects high earners.
Who’s eligible
- Almost all employees, including full-time, part-time and casual. The old $450-a-month threshold was removed in July 2022.
- Under-18s only if they work more than 30 hours in a week.
- Some contractors. If a contractor is paid wholly or principally for their labour, they can count as an employee for super purposes. See contractor or employee?
When to pay
Super has traditionally been due quarterly, 28 days after the end of each quarter. From 1 July 2026, under the Payday Super changes, employers must pay super at the same time as wages, with contributions reaching the employee’s fund within days of payday [check: confirm Payday Super commencement and the exact deadline]. Check that your payroll software and clearing house can handle it.
Super is only paid when the fund receives it, not when it leaves your account, so allow processing time.
Which fund
New employees can choose their own fund. If they don’t, you must check with the ATO whether they have a stapled fund (an existing fund that follows them from job to job) before paying into your default fund.
Getting it wrong
Late or missed super attracts the super guarantee charge: the shortfall, interest and an admin fee, none of it tax deductible. Directors can be personally liable for unpaid super through director penalty notices. It’s one of the ATO’s highest priorities.
Payroll processing, including super and STP, is a service we quote separately from our business packages.
For employees
Check it’s being paid
Your super should appear on your payslip and in your fund account. You can see what’s been reported in myGov. If it’s missing, ask your employer first, then report it to the ATO.
Contribution caps
- Concessional contributions (employer super, salary sacrifice and personal contributions you claim as a deduction) are taxed at 15% in the fund. The cap is $30,000 a year. If your total super balance was under $500,000 at the previous 30 June, unused cap amounts from the previous five years can be carried forward.
- Non-concessional contributions (from after-tax money) aren’t taxed going in. The cap is $120,000 a year, or up to $360,000 over three years under the bring-forward rule, depending on your total super balance.
Ways to boost your super
- Salary sacrifice. Pre-tax salary paid into super is taxed at 15% instead of your marginal rate. Useful once your income is above about $45,000.
- Personal deductible contributions. Contribute from your own money and claim a tax deduction, provided you lodge a notice of intent with your fund in time.
- Government co-contribution. Lower and middle income earners who make after-tax contributions may receive up to $500 from the government.
- Low income super tax offset. If you earn up to $37,000, the government refunds the 15% contributions tax on your concessional contributions, up to $500.
- Spouse contributions. Contributing to a low-income spouse’s super can earn you a tax offset of up to $540.
High earners
If your income plus concessional contributions exceeds $250,000, an extra 15% tax (Division 293) applies to some or all of your concessional contributions.
Getting it out
Super is generally preserved until you reach your preservation age (60) and retire, or turn 65.
Want more control?
If your balance is growing and you’d like to choose your own investments, see is a self-managed super fund right for you? For advice on contribution strategies and retirement, Clarity Wealth’s financial planning works alongside your accountant.