Superannuation guarantee (Australia)

The **superannuation guarantee (SG)** is Australia’s statutory minimum employer contribution to eligible workers’ retirement savings. Employers must calculate contributions using a legislated rate and qualifying earnings, pay them into an eligible superannuation fund or retirement savings account, and meet the applicable deadline. The system began in 1992; the general SG rate reached 12% on 1 July 2025. Since 1 July 2026, the Payday Super rules require payment each payday.^[1][2][3]

Purpose and place in the retirement system

The SG is the compulsory employer-funded component of Australian private retirement saving. It operates alongside the means-tested public age pension and voluntary private saving, including additional contributions people choose to make to their super accounts. The system developed from earlier workplace and award-based superannuation arrangements; the SG framework was introduced in 1992 to extend compulsory contributions across a wider share of employees.^[1]

The SG sets a legal minimum, not necessarily the total amount an employer must contribute under every workplace arrangement. An award, enterprise agreement, employment contract or fund arrangement may require contributions above the statutory minimum or more frequent payments. Meeting the SG minimum does not by itself establish compliance with all such additional obligations.^[4]

Legislation and administration

The principal law is the *Superannuation Guarantee (Administration) Act 1992*. It establishes the rules for employer liability, relevant earnings, eligible contributions and shortfalls. A related law, the *Superannuation Guarantee Charge Act 1992*, imposes the charge payable in specified cases where an employer has a superannuation guarantee shortfall.^[2][5]

The Australian Taxation Office (ATO) administers employer SG obligations. The ATO provides information on eligibility, contribution calculations, payment and reporting, and can assess amounts payable when required contributions are not made in accordance with the law. The Australian Prudential Regulation Authority supervises many Australian superannuation institutions, but the ATO’s role in SG employer compliance is distinct from prudential supervision of funds.^[2][6]

Contribution rate and calculation

The general SG rate is 12% for earnings paid from 1 July 2025. The rate is applied to the relevant earnings of eligible workers, subject to the statutory maximum contribution base. The ATO’s rate table records a phased increase over time: for example, the rate was 11% from July 2023, 11.5% from July 2024, and 12% from July 2025.^[3]

For earnings paid up to and including 30 June 2026, the quarterly system calculated the minimum SG using an employee’s **ordinary time earnings** (OTE). OTE generally concerns earnings for ordinary hours of work; it can include items such as commissions, shift loadings and some allowances, while overtime payments are generally excluded. The precise treatment depends on the nature of the payment and the governing rules. For that period, the basic calculation was the applicable SG percentage multiplied by OTE, up to the quarterly maximum contribution base.^[4]

From 1 July 2026, the ATO describes the calculation base as **qualifying earnings** for Payday Super. Qualifying earnings include OTE and certain other payments specified in the new rules. The general rate remains 12%, but employers apply it to qualifying earnings in the relevant pay period rather than relying solely on the former quarterly OTE calculation.^[3][7]

The maximum contribution base limits the earnings on which an employer is required to pay the statutory minimum. Earnings above the applicable base do not attract a further mandatory SG contribution under the standard rule, although an employment agreement or other arrangement may require more. The base and the method of applying it differ between the pre-July 2026 quarterly system and the Payday Super system.^[3]

Who is covered

In general, employers must pay SG for eligible employees, including many full-time, part-time and casual workers. Eligibility is not limited to permanent or full-time employment. Special rules apply in certain circumstances, including to workers under 18 and people engaged for domestic or private work. The ATO states that employees aged under 18 generally qualify when they work more than 30 hours in a week; separate conditions apply to some domestic or private workers.^[8]

A person’s contractual label does not always determine SG status. An independent contractor may be treated as an employee for SG purposes when the contract is principally for that person’s labour, skills or effort, the work must be performed personally, and payment is not dependent on achieving a specified result. The ATO notes that having an Australian business number does not, on its own, remove this potential obligation. The contract and actual working arrangement matter.[citation needed]

The SG is an employer contribution and is separate from an employee’s own voluntary contributions. An employee may be able to select the fund receiving employer contributions, subject to applicable choice-of-fund rules. Where a new employee does not make a choice, employers may need to check for a stapled super fund; if no applicable choice or stapled fund is available, a nominated default fund may be used under the relevant rules.^[9]

Payment timing: quarterly contributions and Payday Super

For earnings paid up to 30 June 2026, employers generally had to ensure the fund received contributions at least quarterly. The standard quarterly due dates were 28 October, 28 January, 28 April and 28 July for the quarters ending in September, December, March and June respectively. A payment generally counted when received by the employee’s super fund, not merely when sent to a clearing house, subject to specific arrangements described by the ATO.^[10]

From 1 July 2026, **Payday Super** applies to relevant earnings. Employers must make SG contributions each payday, with the contribution generally required to reach the employee’s fund, together with sufficient information to allocate it, within seven business days after payday. The ATO describes this as a change in timing and calculation basis; the standard rate remains 12%. The reform was enacted in 2025 and took effect on 1 July 2026.^[7][11]

More frequent contributions mean that employer payments are directed to workers’ super accounts nearer to the time wages are paid, rather than being accumulated for a quarterly remittance. The legal obligation remains the employer’s: using payroll software, a clearing house or a payment intermediary does not change the requirement to make a qualifying contribution to the correct fund by the applicable deadline.^[7][10]

Unpaid or late contributions and the charge

An employer who does not pay enough SG, pays late, or fails to pay the correct fund may incur a **superannuation guarantee charge** (SGC) and may have to report the shortfall to the ATO. Under the former quarterly rules, the charge was generally calculated using a shortfall amount, a nominal-interest component and an administration component. The ATO states that the quarterly SGC could exceed the contribution that would otherwise have been paid, and that it was not tax deductible under those rules.^[12][13]

The SGC is not simply another contribution credited directly to the worker’s ordinary super account. Its components and administration are defined by legislation, and the ATO provides separate lodgment and payment processes for employers with a shortfall. The charge framework has been revised for Payday Super; therefore, the components and consequences applicable to a particular shortfall depend on when the relevant earnings were paid and which rules apply.^[2][12]

Under the quarterly system, employers who missed a due date generally had to lodge an SGC statement and pay the charge by the relevant deadline. Paying a contribution late to a fund did not automatically erase the reporting obligation. The ATO’s guidance also distinguished late contributions and potential offsets from on-time SG contributions.^[10][12]

Reporting and practical operation

Employers need records that support their determination of worker eligibility, earnings, contribution amounts, payment dates and destination funds. They must use a fund or retirement savings arrangement permitted under the applicable rules and provide the information needed for the contribution to be allocated to the worker. Under Payday Super, the ATO has also described payday reporting of qualifying earnings and super liability through Single Touch Payroll processes.^[7][14]

For workers, employer SG contributions are credited to their superannuation account and form part of their retirement savings. The value ultimately available depends on contributions, investment returns, fees, insurance premiums, taxes and withdrawals under applicable law and fund terms. The SG rate alone does not determine an individual’s eventual retirement balance.^[1]

Related concepts

The SG is part of Australia’s broader superannuation system. It is also related to MySuper, a regulated default product category relevant to employer default arrangements; the ATO, which administers employer compliance; and the APRA, which supervises many superannuation funds. The Australian Treasury has a policy role in the retirement income system and superannuation legislation.^[1][6][9]