Superannuation Guarantee 2025: The 11.5% to 12% Transition

The Super Guarantee transition has been climbing steadily since 2014. From 1 July 2025, the rate hits its legislated final destination of 12% — and from 1 July 2026, the Payday Super reform kicks in, fundamentally changing how and when employers pay it.

This guide covers what changes, what stays the same, and the most expensive mistakes Australian employers make.

The rate timeline

The transition is mandated by the Superannuation Guarantee (Administration) Act 1992. There are no further scheduled rate increases beyond 12%.

For an employer, the practical impact of the 0.5% jump on 1 July 2025 is straightforward: every dollar of Ordinary Time Earnings (OTE) attracts an extra 0.5% in employer cost.

Ordinary Time Earnings — the definition that matters

SG is calculated on Ordinary Time Earnings, not gross wages. The two are similar but not identical. OTE includes:

• Ordinary hours of work
• Bonuses and commissions
• Most allowances
• Paid leave (annual, personal, parental)
• Casual loadings

OTE excludes:

• Overtime
• Reimbursements of business expenses
• Termination payments (mostly)
• Lump sum redundancy payments

Two examples that catch employers out:

1. Christmas bonuses are generally OTE and attract SG.
2. Overtime is not OTE — but if your award treats certain "ordinary" hours as overtime for pay purposes, the OTE classification may differ.

When in doubt, use the ATO's SG eligibility decision tool.

Maximum Super Contribution Base

There's a quarterly cap on the OTE that attracts SG. Above the Maximum Super Contribution Base (MSCB), no SG is owed.

A high-earning employee on A$280,000 salary has SG paid on A$67,820 × 4 = A$271,280, not the full A$280,000.

Quarterly payment dates

SG must be received by the super fund (not just sent by you) by:

These are received-by-fund deadlines, not "paid by employer" deadlines. Most clearing houses (Beam, SuperStream, etc.) take 3–5 business days to deliver to the fund. Pay at least a week before the due date.

The Super Guarantee Charge — a brutal penalty

If SG is paid late or unpaid, the Super Guarantee Charge (SGC) applies. It's not a small admin penalty — it's a complete reset:

1. Shortfall amount: not just the SG you missed, but all wages including overtime become the base (overtime is normally excluded from OTE)
2. Interest at 10% per annum from the start of the quarter (not from the due date)
3. Administration fee of A$20 per employee per quarter
4. Not deductible — the entire SGC is a non-deductible expense for company tax purposes

A worked example: employer fails to pay A$5,000 SG by the deadline.

The SGC is also reported on the company tax return and visible to the ATO; persistent SG default attracts Director Penalty Notices that make directors personally liable.

Payday Super (from 1 July 2026)

The single biggest change since SG was introduced. From 1 July 2026:

• Super must be paid at the same time as wages, not quarterly
• Maximum delay: 7 calendar days from pay date to fund receipt
• SGC reform: simpler calculation, but still non-deductible

The reform aims to:

• Reduce unpaid super (currently estimated at A$5 billion+ per year)
• Improve compounding for younger workers (extra 25 years of compounding)
• Bring super in line with PAYG real-time reporting via STP

For employers, the practical change:

• Cash flow shifts forward — you pay SG roughly 6 weeks earlier on average
• Software automation becomes essential — manual quarterly batching no longer works
• Director-only Pty Ltds are equally caught — every director pay run triggers SG within 7 days

If you currently pay SG quarterly, start moving to monthly now to test your processes before mandatory payday super begins.

Director-only Pty Ltds

A common misconception: "I'm just paying myself, do I need to pay super?"

Yes. A director taking salary from their own company is treated as an employee for SG purposes. The 11.5% (rising to 12%) applies to your own salary just as it would to an employee's.

You can pay it into your own super fund — including a Self-Managed Super Fund (SMSF) you control — but the obligation is real. ATO data-matches STP filings against super fund contributions to detect unpaid director super.

Common mistakes

• Paying on the due date. Clearing house delays mean it's late. Pay 5–7 business days early.
• Calculating on overtime. Overtime is generally not OTE and doesn't attract SG.
• Missing the MSCB cap. Paying SG on amounts above the cap is a gift you don't owe — but no harm done.
• Forgetting bonuses and commissions are OTE. Christmas bonus = SG owed.
• Not paying super on parental leave if the leave is paid.
• Treating a contractor as not eligible. SG can apply to contractors paid principally for their labour, even if they have an ABN.

Choice of fund and stapling

When a new employee starts:

1. Ask if they have an existing fund they want SG paid into
2. If yes, pay there
3. If no, check the ATO's stapled super fund service via your STP software
4. If still no fund, pay into your default fund (must be a "MySuper" product)

You must check stapling — paying into a default fund without checking stapling is a breach since 1 November 2021.

How AccountsOS handles superannuation

AccountsOS is live in Australia and runs SG natively:

• Calculates SG on OTE (correctly excluding overtime)
• Applies the MSCB cap automatically
• Pays via SuperStream-compliant clearing house
• Tracks quarterly due dates and reminds you 14 days ahead
• Ready for Payday Super (1 July 2026 transition)
• Director-only flow for solo Pty Ltds

Try AccountsOS free or read about AccountsOS in Australia.

Related reading

• Company tax in Australia: 25% vs 30% explained
• Quarterly BAS and GST guide
• Single Touch Payroll Phase 2 for small business
• Pty Ltd vs sole trader: choosing your structure