Superannuation Guarantee a form of compulsory superannuation for employees, with contributions being made by employers as a percentage of (not deducted from) the ordinary time earnings of employees and certain contractors.

Work done outside Australia by non-residents is excluded from the super guarantee earnings base. (ATO ID 2015/24)

The Superannuation Guarantee Act is administered by the Australian Tax Office, which monitors compliance by employers. It also helps employees find their “lost superannuation” contributions, unclaimed super, and can assist employees wanting to transfer their super from one account to another.

Key ATO references:
For Employees -|-  For Employers

The compulsory Superannuation Guarantee contributions are required to be made as a specified percentage of an employee’s Ordinary Time Earnings before tax.

Super gradually increases from 9% to 12%**

The superannuation guarantee contribution percentage rates are as follows:

Guarantee Rates **
For The Year ending on:Rate
30 June 20119%
30 June 20129%
30 June 20139%
30 June 20149.25%
30 June 20159.5%
 30 June 20169.5%
30 June 20179.5%
30 June 20189.5%
30 June 20199.5%
30 June 20209.5%
30 June 20219.5%
30 June 202210.0%
30 June 202310.5%
30 June 202411.0%
30 June 202511.5%
30 June 2026 and later12.0%


** this table reflects the final position after Federal Budget 2014 rate increase proposals were re-phased in order to secure support from parliament. For details of the amending Bill (now law) see MRRT Repeal Measures Bill.

Superannuation Guarantee Scheme

The Definition of Ordinary Time Earnings (“OTE”)

Not as simple as you’d think, although it starts with an intuitive notion of “ordinary earnings”.

As a generalisation, OTE is understood to refer to ordinarily recurring and unexceptional kinds of wage payments, and therefore doesn’t include (for example) ex gratia and redundancy payments.

However it’s not always clear cut, and there can be a difficulty in practice, in deciding what is “ordinary” in various contexts and what’s not. Overtime earnings, for example, can form part of OTE.

ATO Ruling – Ordinary Time Earnings

The Tax Office has issued rulings on this tricky subject, which includes a fairly long list of what’s in and what’s out of the OTE definition. At the time of writing, the latest ruling is Superannuation Guarantee Ruling SGR 2009/2.

In addition, be aware of the expanded definition of ’employee’ for Superannuation Guarantee purposes, which includes contractors if the contract is “wholly or principally” for their labour. The Tax Office has provided detailed guidance of their interpretations on this issue in ruling Superannuation Guarantee Ruling SGR 2005/1.

Suffice to say that the definitional edges in this area are sufficiently blurred to justify professional advice, especially if you may be forming an opinion to exclude certain payments.

Free Online SGC Eligibility Decision Tool

The ATO has an anonymous on-line Super Guarantee decision tool which can help you step through the issues.

The Minimum – Maximum Wage Limits For Compulsory Contributions

Minimum threshold – gross wages of $450 per calendar month

  • Maximum: OTE in 2015-16 of $50,810 per quarter ($203,240 for the year)
  • Maximum: OTE in 2014-15 of $49,430 per quarter ($197,720 for the year)
  • Maximum: OTE in 2013-14 of $48,040 per quarter ($192,160 for the year)
  • Maximum: OTE in 2012-13 of $45,750 per quarter ($183,000 for the year)
  • Maximum: OTE in 2011-12 of $43,820 per quarter ($175,280 for the year)
  • Maximum: OTE in 2010-11 of $42,220 per quarter ($168,880 for the year)

These thresholds are adjusted annually.

Contributions above these earnings base levels are voluntary. Note also that Superannuation Guarantee contributions count towards an individual’s concessional contributions cap.

The Age Limits


  • Under 18 part time employees, i.e. working less than 30 hrs per week. (Each week considered separately)
  • Employees over age 70 until 30 June 2013


  • Effective from 1 July 2013 there is no upper age limit, bringing eligible employees over the age of 70 years back into the SGC net.

Time Limits: When Do The Contributions Need To Be Paid

The ATO time limit for payment of Superannuation Guarantee contributions is 28 days after the end of each quarter. Some employment agreements or awards may provide a greater frequency.

Failure to make a contributions deadline, requires a Superannuation Charge statement to be lodged and paid within a further 28 days. The Superannuation Charge is non tax deductible and made up of:

  • the required superannuation contributions (less any since paid)
  • interest
  • administration penaltysg-new

Update From 1 July 2016 the superannuation guarantee charge is proposed to be simplified and modified. The changes include using ordinary time earnings to calculate the SG charge instead total salary and wages, and a softening of the penalty/interest provisions. See Minister’s media release and draft legislation.

Employee’s Choice of Super Fund

Since 1 July 2005, eligible employees have had the right to choose the super fund for their compulsory superannuation guarantee contributions. The criteria for determining employee eligibility can be reviewed here.

Choice requirements have been simplified by removing the obligation to offer a choice of fund to temporary resident employees, or when superannuation funds merge. The changes take effect from 1 July 2015.

An employer meets the choice requirements by giving the employee a Standard Choice Form (PDF download) and then acting on the employee’s election within 2 months.

If an employee fails to complete a choice nomination and provide the necessary information, the employer has to pay the superannuation guarantee contributions to a complying Employer Nominated Fund which must also (with some exceptions) offer a minimum level of life insurance cover.

An employer is only obliged to respond to one choice nomination within each year.

Small Business Superannuation Clearing House

This is a free government superannuation payments clearing service for small businesses with less than 20 employees.

This enables small businesses to make one payment to the clearing house, which then disburses the money to the required selection of superannuation fund accounts.

See: Small Business Clearing House.


This page was last modified on 25 August 2015