Australia Superannuation Guarantee: 12% from July 2025

The Superannuation Guarantee (SG) is the compulsory minimum employer contribution to an employee’s retirement savings fund. Under the Superannuation Guarantee (Administration) Act 1992 (Cth) s.19, the SG rate has been progressively increased from 9.5% (2014–2021) to 11% (1 July 2023), 11.5% (1 July 2024), and 12.0% from 1 July 2025. The 12% rate is the legislated final point in the SG rise schedule introduced by the Treasury Laws Amendment (Increasing the Superannuation Guarantee) Bill 2018.

The Statutory Rate Schedule

Under Superannuation Guarantee (Administration) Act 1992 (Cth) s.19, the minimum SG percentage applicable to ordinary time earnings is:

The 12% rate is the legislated terminal point — there is no further scheduled increase.

ATO source: https://www.ato.gov.au/businesses-and-organisations/super-for-employers

Who Receives Super?

Under Superannuation Guarantee (Administration) Act 1992 (Cth) s.12, an employee is entitled to SG if they:

• Are an employee for SG purposes (most national-system employees, including casuals)
• Are 18 or over OR under 18 and work more than 30 hours a week
• Are paid for work performed in Australia (or qualify under specific overseas-work rules)

The previous A$450 monthly earnings threshold was abolished from 1 July 2022. Employees now receive SG from the first dollar of OTE — even casuals working a single shift.

Ordinary Time Earnings (OTE) — What’s Included

OTE is the base on which SG is calculated. Under Superannuation Guarantee (Administration) Act 1992 (Cth) s.6, OTE generally includes:

• Base salary or wages for ordinary hours of work
• Over-award payments
• Shift loadings
• Casual loading (the 25% loading for casuals)
• Allowances paid for ordinary hours of work
• Bonuses paid in respect of ordinary hours
• Annual leave taken (paid at OTE) — leave loading is not OTE

Excluded from OTE:

• Overtime payments (where overtime is clearly distinct from ordinary hours)
• Reimbursement of expenses
• Lump sums on termination (e.g. unused annual leave, redundancy)
• Workers’ compensation payments where employee is not working

The ATO’s authoritative guidance on OTE classification is published at https://www.ato.gov.au/tax-rates-and-codes/key-superannuation-rates-and-thresholds/list-of-payments-that-are-ordinary-time-earnings.

Maximum Contribution Base

There is a per-quarter cap on OTE for SG purposes — the maximum super contribution base. Above this, the employer is not required to pay SG (although it may voluntarily). The base is indexed each 1 July. Current and historical values are published at https://www.ato.gov.au/tax-rates-and-codes/key-superannuation-rates-and-thresholds/maximum-super-contribution-base.

Payment Frequency — Quarterly (Soon to be Per Pay Period)

Currently, employers must pay SG at least quarterly under Superannuation Guarantee (Administration) Act 1992 (Cth) s.23. The quarterly cut-off dates are:

”Payday Super” — Coming 1 July 2026

The Treasury announced in 2023 that, from 1 July 2026, SG must be paid at the same time as wages (every pay period), not quarterly. Legislation is progressing through the Parliament. Operators should monitor https://treasury.gov.au/ for the commencement date and any transitional arrangements.

Choice of Fund and Stapled Super

Under Superannuation Guarantee (Administration) Act 1992 (Cth) s.32C, employers must give new employees a Standard Choice Form within 28 days of starting. The employee can:

1. Nominate their own fund (in which case the employer pays into that fund), or
2. Not nominate (in which case the “stapled super” rules apply).

Stapled Super (from 1 November 2021)

Under the Treasury Laws Amendment (Your Future, Your Super) Act 2021 (Cth), if a new employee does not nominate a fund, the employer must request the employee’s “stapled” fund from the ATO via ATO Online Services for Business. The stapled fund is the employee’s existing super account that follows them between jobs.

If the ATO returns no stapled fund, the employer pays SG into the employer’s default fund (which must be a MySuper-authorised product).

ATO stapled-fund process: https://www.ato.gov.au/businesses-and-organisations/super-for-employers/setting-up-super-for-your-business/offer-employees-a-choice-of-super-fund/request-stapled-super-fund-details-for-employees

Late or Underpaid Super — Consequences

Super Guarantee Charge

If an employer fails to pay the correct SG by the quarterly cut-off date, they must lodge a Superannuation Guarantee Charge (SGC) Statement and pay the SGC, which comprises:

• Shortfall amount (calculated on total salary and wages, not just OTE — broader base)
• Nominal interest (10% per annum)
• Administration fee (A$20 per employee per quarter)

The SGC is not tax-deductible to the employer (Superannuation Guarantee (Administration) Act 1992 (Cth) s.16(2)) — making it materially more expensive than paying super on time. The shortfall portion of the SGC is paid to the employee’s super fund; interest and admin fees go to the ATO.

Director liability

Under Taxation Administration Act 1953 (Cth) Sch 1 Div 269, directors of a company that fails to pay SGC can be made personally liable through a Director Penalty Notice (DPN). Lock-down DPNs (where the SGC remains unreported for more than 3 months) cannot be remitted by appointing administrators or liquidators.

Underpayment penalties

Beyond the SGC, the ATO may apply additional administrative penalties under Pt 5-30 of the Taxation Administration Act for failure to keep records or for fraudulent behaviour.

ATO super compliance: https://www.ato.gov.au/businesses-and-organisations/super-for-employers/avoiding-mistakes/super-guarantee-charge

Salary Sacrifice and Reportable Super

From 1 January 2020, employees who salary-sacrifice into super receive SG on their pre-sacrifice salary — not the reduced salary after sacrifice. This was introduced to prevent the previous practice of using salary-sacrifice to lower the SG base.

Salary-sacrificed amounts above SG are reportable employer super contributions and may affect the employee’s adjusted taxable income for various government benefits.

SG and Casual Employees

Casuals receive SG at the same rate as full-time and part-time employees. The casual loading (typically 25% under modern awards) is OTE — so it is included in the SG calculation.

Example: A casual employee earns A$30/hour ordinary base + 25% loading = A$37.50/hour. SG at 12% = A$4.50/hour into super.

Practical Compliance Checklist

1. Verify rate is 12.00% from 1 July 2025
2. Identify each employee’s OTE — base + loading + shift + allowances; exclude overtime
3. Calculate monthly or fortnightly contribution based on OTE
4. Pay quarterly (or per pay period from 1 July 2026) into stapled or chosen fund
5. Use SuperStream-compliant clearing house — small businesses can use the ATO Small Business Superannuation Clearing House at https://www.ato.gov.au/businesses-and-organisations/super-for-employers/paying-super-contributions/how-to-pay-super
6. Record contributions on pay slips under Fair Work Regulations 2009 reg 3.46
7. Keep records for 5 years (Tax Administration Act) — and 7 years for Fair Work purposes (s.535)
8. Diary the 28-day Standard Choice Form deadline for every new starter
9. Request stapled fund details from ATO if employee does not nominate

Common Errors

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Disclaimer

Legal information, not legal advice. MmowW Scrib🐮 is operated by a licensed Gyoseishoshi (行政書士) office in Japan. We are not Australian solicitors, barristers, or migration agents.

Sources

• ATO super for employers: https://www.ato.gov.au/businesses-and-organisations/super-for-employers
• ATO super rates and thresholds: https://www.ato.gov.au/tax-rates-and-codes/key-superannuation-rates-and-thresholds
• ATO super guarantee charge: https://www.ato.gov.au/businesses-and-organisations/super-for-employers/avoiding-mistakes/super-guarantee-charge
• Federal Register of Legislation — Superannuation Guarantee (Administration) Act 1992: https://www.legislation.gov.au/Series/C2004A04471