What superannuation do I need to pay for employees in Australia?
Australian employers must pay superannuation guarantee (SG) contributions of 11.5% of an employee's ordinary time earnings in 2024-25 into a complying superannuation fund. Contributions are due quarterly, and failure to pay attracts the superannuation guarantee charge (SGC).
Detailed Explanation
Superannuation is a compulsory retirement savings system in Australia. Employers must contribute a minimum percentage of eligible employees' earnings to a complying superannuation fund. Understanding your obligations, the correct base salary, and the payment deadlines is essential to avoiding the Superannuation Guarantee Charge (SGC).
The 2024-25 Super Guarantee rate: 11.5%
The Superannuation Guarantee (SG) rate for 2024-25 is 11.5% of an employee's ordinary time earnings (OTE). The rate is legislated to reach 12% from 1 July 2025.
Historical rate increases: - 2022-23: 10.5% - 2023-24: 11.0% - 2024-25: 11.5% - 2025-26 onwards: 12.0%
What is ordinary time earnings (OTE)?
OTE is the amount employees earn for ordinary (non-overtime) hours. It includes normal wages and salary, commissions, allowances where they form part of ordinary pay, bonuses paid for ordinary work, and casual loading. OTE does not include overtime payments, unused annual leave payments on termination, or reimbursements of expenses.
The maximum SG contribution base
For 2024-25, employers are only required to pay super on earnings up to the maximum super contribution base of $62,270 per quarter ($249,080 per year). Earnings above this quarterly cap are not subject to the SG obligation.
Who is an eligible employee for SG?
From 1 July 2022, the $450 per month earnings threshold was abolished. All employees regardless of earnings now attract the SG obligation, provided they are: - Over 18 years old, OR - Under 18 and work more than 30 hours per week
This includes casual and part-time employees. It also includes company directors who receive wages or director's fees.
Super choice — where to pay
Most employees are entitled to choose their own superannuation fund. If an employee does not nominate a fund, you must check whether they have a stapled super fund (a fund following them from a previous employer) by checking the ATO's online services. If no stapled fund exists, you can pay into your default fund.
Payment deadlines — the critical compliance point
SG contributions must be paid to the employee's super fund (not just transferred from your bank) by the quarterly due dates: - Q1 (July-September): due 28 October - Q2 (October-December): due 28 January - Q3 (January-March): due 28 April - Q4 (April-June): due 28 July
The contributions must be received by the fund by these dates. Allow 3-5 business days for super funds to process contributions.
Superannuation Guarantee Charge (SGC): the penalty for late payment
If you miss a quarterly deadline, you must lodge an SGC statement with the ATO and pay the SGC, which is more expensive than the original super liability: - The SGC applies to a broader base (salary and wages, not just OTE) - An interest component of 10% per annum is added - An administration charge of $20 per employee per quarter is added - The SGC is not tax-deductible (unlike regular super contributions)
Director liability for unpaid super
Company directors can be personally liable for unpaid SGC through the director penalty notice regime. The ATO takes unpaid super seriously and has increased enforcement activity in recent years.
The small business super clearing house (SBSCH)
The SBSCH is a free ATO service that allows businesses with 19 or fewer employees (or aggregated turnover under $10 million) to make super contributions in a single payment, which the clearing house then distributes to each employee's nominated fund.
Source: ATO Superannuation for employers
Real-World Examples
Quarterly super calculation for a small team
A Pty Ltd has two employees with OTE of $3,500 and $5,000 per month respectively in Q1 (July-September). Total OTE for the quarter: Employee 1: $10,500; Employee 2: $15,000. SG at 11.5%: Employee 1: $1,207.50; Employee 2: $1,725. Total super due by 28 October: $2,932.50.
Employee reaching the maximum contribution base
A senior manager earns $100,000 per quarter. The maximum SG base is $62,270 per quarter. The employer only needs to pay super on $62,270: $62,270 x 11.5% = $7,161.05 per quarter. The manager's earnings above $62,270 are not subject to the compulsory SG obligation.
Common Mistakes to Avoid
- Calculating super on total remuneration including overtime rather than ordinary time earnings — overtime hours are excluded from the SG base.
- Confusing the date super is transferred from your bank with the date it is received by the fund — the deadline is when the fund receives the contribution, not when you send it.
- Missing the removal of the $450 per month threshold from July 2022 and continuing to exclude low-paid casual employees from super — all employees now attract super regardless of monthly earnings.
- Not checking for stapled super funds for new employees and inadvertently paying into the wrong fund — the ATO's online stapled fund check is now a mandatory step for new starters.
Frequently Asked Questions
What is the small business super clearing house (SBSCH)?
The Small Business Super Clearing House (SBSCH) is a free ATO service that allows businesses with 19 or fewer employees (or aggregated turnover under $10 million) to make super contributions in a single payment, which the clearing house then distributes to each employee's nominated fund. This simplifies super administration and provides a single payment receipt for tax records.
Can I pay super monthly rather than quarterly?
Yes. While the compulsory payment deadline is quarterly, you can pay more frequently. Paying monthly or at each pay period improves your cash flow visibility and reduces the risk of missing a quarterly deadline. Some award conditions or enterprise agreements may also require more frequent payment.
Am I entitled to super if I am self-employed?
Self-employed individuals (sole traders and company directors who do not receive wages) are not entitled to compulsory super from an employer. However, self-employed people can make voluntary concessional contributions to their own super fund up to $30,000 per year (2024-25) and claim a tax deduction for those contributions. This is highly tax-effective.
What happens if I underpay super — can I fix it?
If you discover you have underpaid super, you can voluntarily lodge an SGC statement with the ATO and pay the shortfall. While you will still owe the SGC (which is more expensive than the original super), voluntary disclosure is treated more favourably than ATO-detected non-compliance.
Practical Tips
- Set a calendar reminder for the 20th of October, January, April, and July — giving yourself 8 days before the due date ensures super reaches the fund on time even with processing delays.
- Use the ATO's small business super clearing house (SBSCH) to simplify quarterly payments — one payment, one record, and the SBSCH handles distribution to multiple funds.
- Calculate super on a per-pay-period basis using payroll software and set aside the amount each pay run — treating it as an accrual prevents end-of-quarter cash crunches.
- Check for new employees' stapled super funds through ATO online services before their second pay — failing to pay into the correct stapled fund creates administrative complexity and potential compliance issues.
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