What Is the Super Guarantee Rate? A Complete Guide for Australian Employers in 2025

Who Needs to Pay Super Guarantee Contributions?

Employers must pay SG contributions for a broad range of workers. Understanding which employees are covered helps you meet your obligations and avoid Superannuation Guarantee Charge penalties.

To avoid costly penalties and legal issues for missing super payments in NSW, read our article on Super Guarantee Charge for NSW Employers to learn about the latest rules, deadlines, and how to stay compliant in 2025

Which Employees Are Eligible for Super Guarantee?

You must pay Superannuation Guarantee contributions for most Australian employees, including those who work full-time, part-time, or casual hours. This includes temporary residents, public sector workers, company directors, and family members working in your business. The requirement to pay SG applies regardless of how much an employee earns, as the previous minimum amount threshold has been removed.

Super for Employees Under 18

For employees under 18, you only need to pay SG contributions if they work more than 30 ordinary hours in a week. If they do not meet this threshold, you are not required to pay superannuation contributions, though you may choose to pay super as part of your employment offering.

Changes to Minimum Earnings Threshold

Previously, employers did not have to pay SG contributions for employees earning less than $450 per month. This threshold was removed, so now all eligible employees, including low income earners, must receive Super Guarantee payments, regardless of their monthly earnings.

How to Calculate Super Guarantee Contributions

Getting your SG contributions right is essential for compliance. Here’s how to ensure you’re paying the correct amount for each eligible person.

Understanding Ordinary Time Earnings

Superannuation guarantee contributions are calculated on an employee’s Ordinary Time Earnings (OTE), which generally includes what employees earn for their ordinary hours of work. OTE covers base salary, commissions, shift loadings, some allowances, and bonuses, but excludes overtime unless it is part of ordinary hours. The ATO provides detailed guidance on what counts as OTE for super calculation purposes.

Maximum Super Contribution Base

Employers must pay Superannuation Guarantee (SG) contributions up to a set limit each quarter, known as the maximum super contribution base. For 2024–25, this limit is $65,070 per quarter. If an employee’s earnings exceed this amount, SG contributions are not required on the excess, though employers may choose to contribute more. The limit is updated each financial year.

Calculating the 12% Super Guarantee

To work out your SG contributions from 1 July 2025, multiply each eligible employee’s ordinary time earnings by 12%. For example, if an employee’s OTE is $5,000 for a month, you would pay super contributions of $600 ($5,000 × 12%). This calculation must be done for each pay period and paid to a complying super fund or retirement savings account.

Super Guarantee Payment Due Dates for 2025

Paying SG contributions on time is crucial. The ATO requires employers to pay super at least quarterly, and late payments may result in the superannuation guarantee charge.

Quarterly Payment Schedule

You must pay SG contributions by these deadlines each financial year:

• July–September quarter: by 28 October

• October–December quarter: by 28 January

• January–March quarter: by 28 April

• April–June quarter: by 28 July

If a due date falls on a weekend or public holiday, you can pay on the next business day. Remember, SG payments are only considered paid when they reach the employee’s super fund, not when you process them, so allow time for clearing.

Using Clearing Houses for Super Payments

Clearing houses, like the ATO’s Small Business Superannuation Clearing House, can help you pay super contributions to multiple superannuation funds in one transaction. However, this service will be retired from July 2026 as part of the transition to payday super.

Consequences of Missing Super Guarantee Payments

Missing an SG payment can lead to the superannuation guarantee charge (SGC), which includes the unpaid SG amount (calculated on total salary and wages, not just OTE), nominal interest, and an administration fee. The SGC is not tax deductible, so you lose the tax deduction you would otherwise receive for timely superannuation contributions. If you miss a deadline, you must lodge a superannuation guarantee charge statement with the ATO.

Preparing for the 2025 Rate Increase

Planning ahead for the new SG rate helps you stay compliant and manage costs.

Updating Your Payroll Systems

Check that your payroll system is set to apply the 12% superannuation guarantee rate from 1 July 2025. If you use payroll software, confirm with your provider when the update will occur. For manual payroll, adjust your calculations to ensure you pay SG at the new rate on all eligible employee’s ordinary time earnings.

Communicating Changes to Employees

Let employees know about the increase in SG contributions. This helps them understand how their retirement savings are growing and what to expect on their pay slips. It’s also a good time to remind employees about other superannuation options, such as voluntary contributions, non concessional contributions, and how these affect their total superannuation balance.

Budgeting for the Rate Increase

The increase from 11.5% to 12% means higher employer contributions. Review your budget for the 2025–26 income year to account for this change, especially if you have many employees or high eligible employee’s earnings.

Future Changes Beyond 2025

Looking ahead, employers should be aware of further changes to how superannuation guarantee contributions are managed.

Payday Super in 2026

From July 2026, the government will introduce payday super, requiring employers to pay superannuation contributions at the same time as salary and wages. This will replace the quarterly payment schedule and is designed to ensure employees receive SG payments more regularly. The ATO will provide more details on how this will work, including the transition away from the clearing house.

What Employers Need to Know About Coming Changes

With payday super, you’ll need to integrate super payments more closely with payroll and ensure SG contributions are made promptly. This will affect cash flow and may require updates to your payroll systems. Employers should also keep an eye on changes to concessional contributions caps, non concessional contributions caps, and other superannuation rules that affect both employer contributions and employee contributions.

Additional Key Points for Employers

• The concessional contributions cap limits the amount of before tax super contributions (including SG and salary sacrifice) that can be made each financial year. For 2025–26, check the current cap to avoid excess contributions.

• The low income superannuation contribution helps low income earners boost their retirement savings by refunding contributions tax up to a certain amount.

• If an employee’s total superannuation balance exceeds the maximum limit, they may face additional tax on non concessional contributions.

• Superannuation funds invest contributions to generate investment earnings, which help grow members’ super accounts over time.

• Employees can make voluntary contributions to their super fund, either before tax (concessional) or after tax (non concessional), to further grow their retirement savings.

• Lump sum withdrawals from superannuation accounts are generally only available once an employee reaches preservation age or enters the retirement phase.

• The age pension, provided by the government, is separate from superannuation and is means-tested based on income and assets, including super balances.

• Pay slips should clearly show SG contributions, so employees can track their superannuation guarantee payments.

Conclusion

The increase in the Super Guarantee rate to 12% from 1 July 2025 is an important step in strengthening the retirement savings of Australian employees. Employers must ensure they pay SG contributions at the new rate, update payroll systems, and communicate changes to staff. Staying on top of your superannuation guarantee obligations helps you avoid penalties, maintain your tax deduction, and support your team’s financial future.

As we approach 2025, review your SG processes and prepare for the shift to payday super in 2026. If you have questions about how these changes affect your business, our team is here to help you navigate superannuation guarantee requirements and keep your business on track. How will your business adapt to the new SG rate and upcoming changes in the superannuation system?