Superannuation Guarantee

The superannuation guarantee is 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.

[Update 3 June 2020: Covid-19] JobKeeper payments are excluded from the super guarantee with effect from 30 March 2020 (i.e. the commencement of the Jobkeeper scheme). A regulation made under the Coronavirus Economic Response Package (Payments and Benefits) Rules 2020 excludes amounts paid to employees that do not relate to the performance of work and which are only paid meet the JobKeeper requirements.

The current super guarantee percentage rate is 9.5%.

On this page:

Age Limits
Amnesty until 7 Sept 2020
ATO key references
Choice of fund
Choice to be expanded 1 July 2020 (bill)
Employers jail time
Non-residents’ exclusion
Ordinary Time Earnings
Ordinary Time Earnings Checklist
OTE – Contractors
Payment Time Limits
Salary sacrifice amendment 1 Jan 2020
Super Guarantee opt-out
Super Guarantee rates % current
Super Guarantee rates % earlier years
Wage Limits

Notes for Employers of Certain Non-residents

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

Employers of senior executives or specialists in Australia on certain temporary work visas have relief from the super guarantee under the regulations.

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.

Amnesty for employers from 24 May 2018 to 7 September 2020

This measure provides an opportunity for employers to catch up past super guarantee contributions without penalties and charges that may otherwise apply to late payments, provided they are not already under audit, in which case additional penalties apply (i.e. in addition to nominal interest).

The amnesty applies to unpaid contributions in any quarters from 1 July 1992 to 31 March 2018. (Quarters commencing 1 April 2018 are ineligible).

The amnesty came into effect on 6 March 2020 and gives employers from 24 May 2018 until 11:59pm (Eastern) on 7 September 2020 to disclose, lodge and pay. The deadline is not flexible. The Tax Office has flagged a very strict approach where an employer could have come forward voluntarily to disclose an SG shortfall and failed to do so, with a minimum (after remission) non-disclosure penalty of 100% of the SGC. The automatic penalty is 200%. See  PS LA 2020/D1 Remission of additional superannuation guarantee charge.

Catch-up payments made in the amnesty period between 24 May 2018 and 7 September 2020 are tax-deductible; payments made at other times are not.

Employers who have already made disclosures before the amnesty laws came into effect (6 March 2020) do not need to re-apply. Otherwise employers need to use the approved spreadsheet form downloaded from here.

For a summary of the amnesty incentives see article Superannuation guarantee amnesty – ATO supporting employers affected by COVID-19 [8 April 2020]

Links and further info:

Employers to get jail time for failing to remit SG payments

Legislation has been passed which enables the Tax Commissioner to issue a direction to an employer to pay an outstanding superannuation guarantee liability or an estimate of the liability.

If the mentioned super guarantee amount is not paid within the period specified in the direction, there is a maximum penalty of 50 penalty units, or 12 months jail or both.

The legislation allows a direction to be given to employers to undertake super guarantee education.

See: Treasury Laws Amendment (2018 Measures No. 4) Bill 2018

Superannuation 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.

Compulsory Super Guarantee percentage rate is currently 9.5% and is being increased in future years to reach a target of 12% by the year 2025-26

Super Guarantee Percentage Rates

These tables reflect the final position after the initial Federal Budget 2014 rate-increase proposals were re-phased, and as set out in the MRRT Repeal Measures Bill.

 1 July 2014 to 30 June 2021

For The Year ending on: Rate
30 June 2015 9.5%
30 June 2016 9.5%
30 June 2017 9.5%
30 June 2018 9.5%
30 June 2019 9.5%
30 June 2020 9.5%
30 June 2021 9.5%

1 July 2021 to 30 June 2026 and later

For The Year ending on: Rate
30 June 2022 10.0%
30 June 2023 10.5%
30 June 2024 11.0%
30 June 2025 11.5%
30 June 2026 and later 12.0%

Super Guarantee Earlier years

1 July 1992 to 30 June 2003

Source: A Review Of Australia’s Compulsory Superannuation Scheme After A Decade – M.E. Drew & J Stanford (2003)  

1 July 2002 to 30 June 2014

Years Rate
1 July 2002 to 30 June 2013 9%
1 July 2013 to 30 June 2014 9.25%

The Superannuation Guarantee Scheme

The Definition of Ordinary Time Earnings (“OTE”)

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 or overtime.

From 1 January 2020 the meaning of OTE has been expanded to include amounts which would have been OTE had they not been salary-sacrificed by the employee into an eligible super fund. This measure designed stop the practice of employers counting salary sacrificed super towards their super guarantee obligations. (See Treasury Laws Amendment (2019 Tax Integrity and Other Measures No. 1) Bill 2019 and ATO summary)

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

Leave loading: The Tax Office’s current view is that “annual leave loading will be ordinary time earnings (OTE) unless it is referrable to a lost opportunity to work overtime”. This represents a change in previously accepted practice. See: Compliance approach; Ruling SGR 2009/2; Commentary.

Super guarantee was considered not payable in respect of “additional hours” and “public holidays” salary components salaries because they are not “ordinary time earnings” – according to a May 2019 Federal Court decision reported here.

Ordinary Time Earnings Checklist

See checklist of payments classified as Ordinary Time Earnings.

ATO Ruling – Ordinary Time Earnings – Contractors

The expanded definition of ’employee’ for Superannuation Guarantee purposes 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.

If you are forming your own opinion to exclude certain payments from your super guarantee obligations, professional advice is highly recommended. See the video below from a chartered accountant with practical tips of a general nature.

Amendment – salary packaging

An amendment to the super guarantee laws has been passed which prevents employers exploiting the relationship between salary packaging and the super guarantee requirements.

When a nominal salary is divided into salary plus voluntary super contributions, the law previously allowed employers to count the salary sacrificed super towards its super guarantee obligation calculated on the (reduced) salary component of the package.

Thus less superannuation was paid than might otherwise be the case, the shortfall having been identified as a “superannuation gap“.

The new law takes effect from 1 January 2020 and prevents salary-sacrificed superannuation contributions being counted as part of the employer’s superannuation guarantee obligation.

See ATO guidance: GN 2020/1 Salary sacrifice and super guarantee

For details of the legislation see Treasury Laws Amendment (2019 Tax Integrity and Other Measures No.1) Bill 2019

Super Guarantee Opt-out – multiple employers

Measures have been introduced to allow employees to opt out of Super Guarantee when their entitlement to receive super contributions from multiple employers would result in a breach their concessional contribution limit.

See Treasury Laws Amendment (2018 Superannuation Measures No. 1) Bill 2018

Free Online Super Guarantee Eligibility Decision Tool

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

This short video (3 mins 30 sec) from Accounting Heart Chartered Accountants reveals the issues contractors and business owners face, and possible solutions:

The Minimum and Maximum Wage Limits For Compulsory Contributions

Minimum threshold – gross wages of $450 per calendar month

  • Maximum: OTE in 2021-22 of $58,920 per quarter ($235,680 for the year)
  • Maximum: OTE in 2020-21 of $57,090 per quarter ($228,360 for the year)
  • Maximum: OTE in 2019-20 of $55,270 per quarter ($221,080 for the year)
  • Maximum: OTE in 2018-19 of $54,030 per quarter ($216,120 for the year)
  • Maximum: OTE in 2017-18 of $52,760 per quarter ($211 040 for the year)
  • Maximum: OTE in 2016-17 of $51,620 per quarter ($206,480 for the year)
  • 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 Super Guarantee net.

Time Limits: When Do The Contributions Need To Be Paid

(Note: see amnesty period from 24 May 2018 to 7 September 2020 as above)

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 penalty

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.

See also: How To Choose A Super Fund Like A Pro

Choice to be expanded to workplace agreements from 1 January 2021

The super guarantee rules have been amended to provide that employees under workplace determinations or enterprise agreements made on or after 1 July 2021 have the right to choose their superannuation fund.

See Treasury Laws Amendment (Your Superannuation, Your Choice) Bill 2019 and media release

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.

Ordinary Time Earnings Checklist

See also explanations Ordinary Time Earnings


[Update 3 June 2020: Covid-19] A regulation has been made to exclude JobKeeper payments from the super guarantee with effect from 30 March 2020 (i.e. the commencement of the Jobkeeper scheme).

PaymentSalary or wagesOrdinary time earnings (OTE)
Overtime hours – award stipulates ordinary hours to be worked and employee works additional hours for which they are paid overtime ratesYesNo
Overtime hours – agreement prevails over awardYesNo
Agreement supplanting award removes distinction between ordinary hours and other hoursYes – all hours workedYes – all hours worked
No ordinary hours of work stipulatedYes – all hours workedYes – all hours worked
Casual employee: shift loadingsYesYes
Casual employee: overtime paymentsYesNo
Casual employee whose hours are paid at overtime rates due to a 'bandwidth' clauseYesNo
Piece-rates – no ordinary hours of work stipulatedYesYes
Overtime component of earnings based on hourly-driving-rate method stipulated in awardYesNo
PaymentSalary or wagesOrdinary time earnings (OTE)
Allowance by way of unconditional extra paymentYesYes
Expense allowance expected to be fully expendedNoNo
Danger allowanceYesYes
Retention allowanceYesYes
Hourly on-call allowance in relation to ordinary hours of work for doctorsYesYes
PaymentSalary or wagesOrdinary time earnings (OTE)
Petty cashNoNo
Reimbursement of travel costsNoNo
Payments for unfair dismissalNoNo
Workers' compensation: returned to workYesYes
Workers' compensation: not workingNoNo
PaymentSalary or wagesOrdinary time earnings (OTE)
Annual leaveYesYes
Annual leave loading - demonstrably referable to a loss of opportunity to work overtimeYesNo
Annual leave loading - all otherYesYes
Sick leaveYesYes
Parental leave – eg maternity leave, paternity leave, adoption leaveNoNo
Ancillary leave – eg jury duty, defence reserve serviceNoNo
PaymentSalary or wagesOrdinary time earnings (OTE)
Termination payments: in lieu of noticeYesYes
Termination payments: unused annual leave, long service leave or sick leaveYesNo
PaymentSalary or wagesOrdinary time earnings (OTE)
Performance bonusYesYes
Bonus labelled as ex-gratia but in respect of ordinary hours of workYesYes
Christmas bonusYesYes
Bonus in respect of overtime onlyYesNo

This page was last modified 2020-08-26