Superannuation Explained
Superannuation (super) is money set aside by your employer for your retirement. It's a compulsory system unique to Australia.
Super Guarantee (SG) Rate
For 2024-25, the Super Guarantee rate is 11.5% of your ordinary time earnings. This is paid by your employer on top of your salary – it does not come out of your pay.
Key Facts
- SG rate: 11.5% (increasing to 12% from 1 July 2025)
- Concessional contributions cap: $27,500/year (includes employer SG + salary sacrifice)
- Non-concessional contributions cap: $120,000/year
- Maximum super contribution base: $65,070/quarter
- Super is taxed at 15% inside the fund (concessional contributions)
Salary Package Including Super
Some job offers quote a "total package" that includes super. For example, a $100,000 package including super means your base salary is approximately $89,686 ($100,000 / 1.115), with $10,314 going to super.
How Super is Paid and When It's Due
Employers must pay superannuation at least quarterly, by the 28th day after the end of each quarter (e.g. 28 January, 28 April, 28 July, 28 October). However, many employers choose to pay monthly to stay on top of their obligations. Super is payable on ordinary time earnings (OTE), which typically includes base salary, certain bonuses, and allowances — but not overtime (unless specified in your award or agreement). You’re entitled to super if you’re over 18 and earn more than $450 (before tax) in a calendar month, or if you’re under 18 and work more than 30 hours per week — regardless of your earnings. If your employer doesn’t pay your super or pays late, you can report them to the ATO using the Superannuation Complaints Tool. It’s also worth checking your super statements regularly (via your fund’s online portal or MyGov) to ensure contributions are being made correctly.
Salary Sacrifice and Concessional Contributions
Salary sacrifice is an arrangement where you agree with your employer to forego part of your pre-tax salary in exchange for additional super contributions. These are called concessional contributions and are taxed at 15% inside the super fund — often less than your marginal tax rate, making it a tax-effective way to boost retirement savings. However, there’s a cap: for 2024-25, your total concessional contributions (including employer SG, salary sacrifice, and any personal contributions claimed as a tax deduction) must not exceed $27,500 per year. Exceeding this cap can result in extra tax and administrative burden. It’s important to coordinate with your employer and review your year-to-date contributions before increasing your sacrifice amount, especially towards the end of the financial year. Some employers also offer flexible salary packaging options that include super, so it’s worth discussing with your HR or payroll team.
Superannuation Guarantee Charge (SGC) and Employer Penalties
If your employer fails to pay the correct superannuation guarantee, they may be liable for the Superannuation Guarantee Charge (SGC), which includes the shortfall amount, interest (currently 10% per annum), and an administration fee ($20 per quarter per employee). The ATO can assess and recover SGC on your behalf — you don’t need to do it yourself. Importantly, paying the SGC doesn’t absolve the employer of their legal obligations; repeated or deliberate non-compliance can lead to penalties, prosecution, and even director disqualification. As an employee, you can check your super contributions using your payslips, super statements, or through MyGov’s ATO service. If you suspect underpayment, gather evidence (e.g., payslips, employment contract) and contact the ATO’s Super Hotline (13 10 20) for guidance. Early intervention can help recover missing contributions before the 3-month limitation period expires.