Super Guarantee Explained

The calculation for superannuation under the super guarantee starts with one formula: your employer pays a set percentage of your ordinary time earnings into your super fund. For 2025-26 that percentage is 12 percent. Two questions decide your actual amount: what counts as ordinary time earnings, and whether your earnings are above the maximum contribution base.

To run your own numbers, use our superannuation calculator. To see how super fits your overall pay, use our pay calculator.

What the super guarantee is

The super guarantee, or SG, is the minimum compulsory super contribution your employer must make for you. It is not a deduction from your wages in the usual case. It is an employer contribution paid into your nominated fund, or a default fund if you have not chosen one.

SG is worked out on ordinary time earnings, not necessarily on every dollar in your pay. Two employees on the same total pay can receive different SG amounts if one package includes a lot of overtime and the other does not, because overtime is generally treated differently.

SG is a minimum. Some contracts, awards and enterprise agreements require contributions on a broader base or at a higher rate. Check your contract if you think your employer pays more than the minimum, because many do.

Ordinary time earnings

Ordinary time earnings, or OTE, are generally what you earn for your ordinary hours of work. OTE generally includes base salary or wages, commissions, shift loadings and most allowances, and paid leave.

Overtime payments are generally not OTE, so super is usually not payable on overtime, unless your award, agreement or contract says otherwise. The guarantee is tied to ordinary hours, not extra hours beyond them.

On your payslip, amounts for normal rostered or contracted hours, including paid leave, are usually OTE. Amounts clearly paid for overtime are usually outside it. If a payment is unusual, such as a large commission, check how payroll classified it, because that classification decides whether SG applies.

Bonuses follow the same logic. A bonus relating to ordinary hours of work is generally OTE. A bonus for work outside ordinary hours may be treated differently.

The SG rate and maximum base by year

The SG rate reached 12 percent on 1 July 2025 and stays at 12 percent for the years covered here, based on the ATO key superannuation rates and thresholds in our rates sources. The same table shows the maximum contribution base for each year, covered in detail below.

That change explains many queries. On the same salary, SG in 2025-26 should be higher than in 2024-25, because the rate moved from 11.5 percent to 12 percent. From 2025-26 onward, a change in SG on the same hours is more likely to come from a change in OTE than a change in rate.

The formula is OTE multiplied by the rate for the year. On $100,000 of OTE in 2025-26, SG is $12,000 for the year. In 2024-25, the same earnings at 11.5 percent would have produced $11,500.

The maximum contribution base

Compulsory SG is only required on earnings up to the maximum super contribution base. Above that base, an employer is not required to pay SG on the extra portion, although many contracts and awards require super on full earnings anyway.

The base was a quarterly amount up to and including 2025-26. From 1 July 2026, under Payday Super, it becomes an annual amount. Both figures are in the combined table above.

The ATO worked example for 2025-26 shows the quarterly cap in practice. Quarterly earnings of $70,000 are capped at $62,500, so SG for the quarter is $62,500 multiplied by 12 percent, which is $7,500, rather than 12 percent of $70,000.

For 2026-27, the annual base of $270,830 gives maximum SG of $32,499.60 at 12 percent for an employee above the base all year. Most employees earn well below these limits, so the cap does not affect them: they simply apply the rate to full OTE. No verified 2027-28 maximum base figure was available in our rates sources at the time of writing, so this guide does not state one.

Payday Super from 1 July 2026

Payday Super starts on 1 July 2026. From that date, employers must pay super on payday, at the same time as wages, rather than at least quarterly as applied before.

For employees, the difference is timing and visibility. Contributions should appear in step with your pay cycle, making it easier to match each payslip to a fund contribution and notice a missing payment in the same period, rather than months later.

Payday Super also explains the cap change. A system that pays each payday fits an annual base rather than a quarterly one, which is why the 2026-27 figure above is annual. The rate does not change: it remains 12 percent.

Package versus salary plus super

In a salary plus super arrangement, the quoted salary is gross pay before tax, and SG is paid on top. A salary of $80,000 plus super in 2025-26 means gross pay of $80,000 and an additional $9,600 of SG at 12 percent, subject to the cap and to what counts as OTE.

In a total package arrangement, the quoted figure includes super, and is split into gross salary and SG. A $110,000 package including super in 2025-26 divides by 1.12 to give gross salary of $98,214.29, with $11,785.71 as super. Take home pay is calculated from the gross salary part, not the full package.

Neither structure is better by itself. Compare offers on the same basis, either gross salary or total package, before judging them. Our pay calculator handles the package split, and our superannuation calculator shows SG on the earnings you enter.

Salary sacrifice is different. That is an amount you choose to contribute from before tax pay, on top of compulsory SG. It does reduce take home pay, because it comes out of your pay by choice. Compulsory SG in a salary plus super arrangement does not.

How to check your super

Start with your payslip, which should show the SG amount for the period and the fund it was paid to. Then confirm the contribution arrived in your fund, keeping the Payday Super timing change in mind from 1 July 2026.

Check three things. First, does the earnings base look like your OTE? Second, was the correct rate for the financial year used? Third, does the maximum base apply, and does your contract promise super on full earnings even if it does? If the numbers still do not line up, ask payroll which earnings they treated as OTE. That classification answers most SG queries.

This guide is general information only and is not financial advice. For advice about your fund or retirement plans, speak with a licensed adviser or your super fund.