How much super to pay
Work out how much super you have to pay and what's considered ordinary time earnings (OTE) and overtime.
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Work out how much to pay
The minimum superannuation you must pay for each eligible employee is 10.5% of their ordinary time earnings (OTE). However, it's scheduled to progressively increase to 12% by 2025.
This compulsory payment is called the super guarantee (SG) and is paid at least quarterly.
If you don't pay the required SG amount by the quarterly due date, you must pay the super guarantee charge.
Before you calculate how much super to pay, you should work out if you have to pay super.
To work out how much super to pay, you can use our calculator.
Super guarantee contributions calculatorThe current super guarantee percentage is the minimum required by law. You may pay super at a higher rate under an award or agreement.
To manually work out how much super to pay for a quarter, multiply your employee's OTE, based on salary and wages paid in the quarter (before tax), by the SG rate. If you're paying super at a higher rate, use that rate.
For employees who started during the quarter, work out their super based on any salary and wages paid in the quarter.
Example: working out the minimum super contribution
Jan employs Danni. During the July 2021 – September 2021 quarter of the 2021–22 financial year, Danni's ordinary time earnings are $15,000.
Jan works out the minimum super contribution for Danni for the quarter:
$15,000 × 10% = $1500
Jan contributes $1500 to Danni's super fund by the quarterly due date, which is 28 October 2021. If Jan fails to do this, she may have to pay the super guarantee charge.
End of example
Example: working out the correct super contribution rate – fortnightly pay period
Peter employs Sue. For the pay fortnightly pay period ending 27 June 2022, Sue's ordinary time earnings are $3,000. Peter pays Sue on 1 July 2022. The minimum super contribution for Sue for the pay period is:
$3,000 × 10.5% = $315
Peter contributes $315 for the July to September quarter to Sue’s super fund by the quarterly due date, which is 28 October 2022. The super guarantee rate on the date the salary is paid applies.
End of example
Example: working out the correct super contribution rate – monthly pay period
XYZ Pty Ltd employs Neil and pays a monthly salary. For the monthly pay period starting 21 June 2022 and ending 20 July 2022, Neil’s ordinary time earnings are $6,200. XYZ Pty Ltd pays Neil on 6 July 2022. The minimum super contribution for Neil for the pay period is:
$6,200 × 10.5% = $651
XYZ Pty Ltd contributes $651 for the July to September quarter to Neil’s super fund by the quarterly due date, which is 28 October 2022.
End of exampleOrdinary time earnings
Ordinary time earnings (OTE) is the gross amount your employees earn for their ordinary hours of work (before tax). It includes:
- over-award payments
- commissions
- shift loading
- annual leave loading
- allowances
- bonuses.
Check a specific type of payment with List of payments that are ordinary time earnings.
Ordinary hours
Your employee's ordinary hours are 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 are 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.
If you pay a contractor mainly for their labour, you calculate SG on the labour component of the contract.
Overtime
Overtime payments are not OTE, provided the employee's ordinary hours of work are clearly identified.
If you can't distinctly identify overtime amounts, all the hours actually worked are included in the employee's ordinary hours of work.
The above rules also apply if the payments are calculated as an annualised or lump sum component of a total salary package. Overtime payments must be clearly identifiable, otherwise all hours worked are OTE.
Maximum super contribution
You don't have to pay SG for your employee's earnings above a certain limit, called the maximum contribution base.
This base amount is indexed annually and is usually available before the start of the financial year.
It does not apply to other mandated contributions, such as contributions you pay under an award.
Example: maximum contribution base for SG
Rory is the Marketing Manager of ABC Pty Ltd.
During the July–September quarter of the 2021–22 financial year, Rory's OTE is $60,000.
The quarterly maximum contribution base for 2021–22 is $58,920
ABC Pty Ltd uses the maximum contribution base to work out the SG contribution for Rory for the quarter:
$58,920 × 10% = $5892
Rory's OTE above $58,920 is ignored.
End of exampleBack pay
You must pay super on back pay of amounts that are OTE, even if the employee no longer works for you.
If you don't, you'll be liable for the super guarantee charge.
Example: back pay for an employee that has finished employment
On 30 June 2021, Sue finished her employment with company ZYX. In September 2021, ZYX realised it had been underpaying its employees. The company needed to give Sue back pay of an extra 2% for the period from 1 January 2021 to 30 June 2021.
ZYX must pay an SG contribution for the back pay by the quarterly due date of 28 October 2021 – that is, 28 days after the quarter in which Sue was actually paid.
Between 1 January to 30 June 2021, Sue’s OTE is $60,000. ZYX works out the total back pay amount for this period:
$60,000 × 2% = 1,200
The company calculates Sue's SG contribution at 10% of her back pay. This is because the salary and wages back payment was made after 1 July 2021, when the rate increased from 9.5% to 10%.
SG contributions must be paid on the back pay for the quarter that corresponds to the date of payment – in this case, the September 2021 quarter. The payment would usually be made to the fund the company paid Sue's last super contribution into.
ZYX pays Sue on the 6 September 2021. The additional super contribution for Sue for the period is:
$1,200 × 10% = $120
If the company doesn't pay the minimum super on time to a complying fund or retirement savings account, they will have to pay the superannuation guarantee charge to us.
End of example