How much to pay
The minimum super you must pay each quarter for each eligible employee is called the super guarantee (SG).
Currently the SG is 9.5% of their ordinary time earnings (OTE).
OTE is usually the amount your employee earns for their ordinary hours of work. It includes things like commissions, shift loadings and allowances, but not overtime payments.
To work out what you must pay, multiply your employee's OTE for the quarter by the SG rate (or the percentage you use if you're paying super at a higher rate).
During the first quarter of the 2014–15 financial year (1 July – 30 September 2014) Danni's ordinary time earnings were $8,000.
The super contribution Danni's employer had to pay for Danni for this quarter was:
$8,000 x 9.50% = $760
To avoid the super guarantee charge, Danni’s employer must have contributed at least $760 to a complying super fund or RSA for Danni by 28 October 2014.
End of example
For employees who started in the quarter, their earnings are calculated from the day they started.
If you make super contributions under an award, check that they are enough to satisfy both the award and the SG.
You can use our Superannuation guarantee (SG) contributions calculator to work out how much super you must contribute for your eligible workers.
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Your employee's ordinary hours will be the normal hours they work, unless their hours are specified in an award or agreement.
If you can't determine the normal hours of work (such as for casual workers), the actual hours the employee works will be their ordinary hours of work.
The Fair Work Act's definition of ordinary hours for workers not under an award or agreement caps them at 38 hours. This definition does not override the super laws above.
Ordinary time earnings (OTE)
Ordinary time earnings are generally what your employees earn for their ordinary hours of work, including:
- over-award payments
- shift loading
Our checklist shows various types of payments employees may receive, and whether those payments are OTE.
Payments for work performed outside an employee's ordinary hours of work are not OTE. This applies even if:
- the payments are calculated at an hourly rate
- the employee gets a specific loading
- the payments are calculated as an annualised or lump sum component of a total salary package.
But if you can't distinctly identify overtime amounts, the hours actually worked will be included in ordinary hours of work.
Maximum contribution base
You don't have to pay SG for your employee's earnings above a certain limit, called the maximum contribution base. This base is indexed annually and is generally available before the start of each financial year. It does not apply to other mandated contributions, such as contributions you pay under an award.
While the base limits the amount that you have to pay for SG purposes, funds can accept contributions above it. Your employees should be aware that SG contributions count towards their concessional contributions cap in the year the fund receives the contribution.
You must pay super on back pay (of salary or wages), even if the employee no longer works for you. If you don't, you'll be liable for the super guarantee charge.
On 30 June 2014, Sue finished her employment with company ZYX. In September 2014, the company gave Sue back-pay of 2% for the period from 1 January 2014 to 30 June 2014.
The company must pay a super contribution for the back-pay and they must do this by the quarterly due date of 28 October 2014.
The company will need to calculate Sue's super contribution at 9.5%. The payment should generally be made to the fund the company paid Sue's last super contribution into.
If the company doesn't pay the super on time to a complying fund or retirement savings account, they will have to lodge a superannuation guarantee charge statement and pay the charge to us.
End of example
Each quarter, for each eligible employee, you must pay the minimum percentage of their ordinary time earnings in super. Ordinary time earnings (OTE) are usually the amount your employee earns for their ordinary hours of work. It includes things like commissions, shift loadings and allowances but not overtime payments.