What Is Superannuation?
Superannuation is Australia's compulsory retirement savings system, requiring every employer to deposit 12% of an employee's ordinary time earnings into a registered super fund for the 2025-26 financial year. The system covers approximately 16.5 million accounts and holds over $3.9 trillion in assets, making it the fourth-largest pension pool globally behind the United States, United Kingdom, and Canada.
Commonly called "super," the system was introduced under the Superannuation Guarantee (Administration) Act 1992 by the Keating Government. Employers pay contributions on top of gross salary, and the money is invested by the fund across asset classes including Australian equities, international shares, fixed interest, and property. The balance grows through a combination of employer contributions, voluntary contributions, and investment returns until the member reaches preservation age and retires.
Super contributions directly reduce the income tax you pay today through concessional tax treatment. Employer super guarantee payments and salary sacrifice contributions are taxed at a flat 15% inside the fund, compared to marginal rates of 30%, 37%, or 45% outside super. Use our Income Tax Calculator to see how your marginal rate compares to the 15% super rate.
Interactive Calculation
Want to see exactly how much super your employer must pay you based on your current salary?
Use our Superannuation CalculatorHow Much Super Does Your Employer Pay?
The Superannuation Guarantee (SG) rate is 12% for the 2025-26 financial year, paid on top of your ordinary time earnings. Employers must deposit this amount into your nominated super fund quarterly, within 28 days of the end of each quarter (28 October, 28 January, 28 April, and 28 July).
The SG rate increased by 0.5 percentage points each year from 2021 to reach the legislated ceiling of 12% on 1 July 2025. No further increases are currently legislated. On a salary of $85,000, the 12% SG adds $10,200 per year to your super balance. The previous rate of 11.5% applied during FY2024-25.
SG Rate History Table (FY2021-22 to FY2025-26)
| Financial Year | Required SG Rate | Annual SG on $85K Salary |
|---|---|---|
| 1 July 2021 – 30 June 2022 | 10.0% | $8,500 |
| 1 July 2022 – 30 June 2023 | 10.5% | $8,925 |
| 1 July 2023 – 30 June 2024 | 11.0% | $9,350 |
| 1 July 2024 – 30 June 2025 | 11.5% | $9,775 |
| 1 July 2025 onwards | 12.0% | $10,200 |
The SG is calculated on "Ordinary Time Earnings" (OTE), not total earnings. Overtime payments, expense reimbursements, and termination payouts are excluded from the SG calculation. The distinction between OTE and total earnings matters most for workers with significant overtime hours — use the Overtime Pay Calculator to separate ordinary and overtime components.
Who Has to Pay Super?
Every Australian employer must pay the 12% SG for all employees regardless of earnings level, employment type, or hours worked. The previous $450-per-month minimum threshold was abolished on 1 July 2022, extending super coverage to approximately 300,000 additional low-income and part-time workers.
- Full-time, part-time, and casual workers: Entitled to super on every dollar of ordinary time earnings, with no minimum monthly income requirement.
- Under 18s: Entitled to super if they work more than 30 hours in a week for that employer.
- Contractors: If you are hired wholly or principally for your labour (even with an ABN), you are an employee for superannuation purposes and entitled to the SG. Use our Contractor vs Employee Calculator to compare the financial difference.
- Temporary residents and working holiday makers: Entitled to SG on the same basis as permanent residents. Super is payable from the first dollar earned. See our Working Holiday Tax Guide for the tax treatment of departing temporary residents.
- Company directors: Entitled to SG if they are also an employee of the company. Directors paid solely as officeholders (director's fees) are not covered unless an employment relationship exists.
Self-employed sole traders and partners in a partnership have no obligation to pay themselves super, though they can make voluntary contributions and claim a tax deduction. Domestic workers employed for fewer than 30 hours per week are also exempt.
What Counts as Ordinary Time Earnings for Super?
Employers calculate the 12% SG on Ordinary Time Earnings (OTE), defined as the amount an employee earns for their ordinary hours of work. OTE includes base salary, allowances, shift loadings, and leave payments, but excludes overtime and termination payments.
Included in OTE (Super Paid)
- Base salary and wages
- Shift loading and casual loading
- Allowances (e.g., danger, retention)
- Bonuses related to performance
- Annual leave and sick leave taken
Excluded from OTE (No Super)
- Overtime hours
- Expenses / reimbursement limits
- Redundancy payouts
- Annual leave paid out on termination
- Maternity/paternity leave (unless guaranteed by employer)
The distinction between OTE and non-OTE payments is governed by Superannuation Guarantee Ruling SGR 2009/2 from the ATO. A common mistake is assuming all bonuses attract super — only bonuses paid for work performed during ordinary hours are OTE. Discretionary bonuses paid as a reward unrelated to specific ordinary-hours work are excluded. Use the Bonus Tax Calculator to calculate how a bonus is taxed and whether it attracts super.
What Are the Super Contribution Caps?
The ATO limits how much you can contribute to super at concessional tax rates each financial year. The concessional cap is $30,000 and the non-concessional cap is $120,000 for FY2025-26. Exceeding either cap triggers additional tax on the excess amount.
| Cap Type | Annual Limit (FY2025-26) | Tax Rate Inside Super | Penalty If Exceeded |
|---|---|---|---|
| Concessional | $30,000 | 15% | Excess added to assessable income, taxed at marginal rate |
| Non-concessional | $120,000 | 0% (already taxed) | 47% tax on excess, or withdraw and pay marginal rate |
| Bring-forward (non-concessional) | $360,000 over 3 years | 0% | Available only if total super balance is below $1.9 million |
Concessional Contributions Cap ($30,000)
The $30,000 concessional cap includes three contribution types: employer SG payments, salary sacrifice amounts, and personal contributions for which you claim a tax deduction. All three count toward the single cap. On an $85,000 salary, the employer SG of $10,200 leaves $19,800 of unused cap space for voluntary concessional contributions.
These contributions are taxed at 15% within the super fund rather than your marginal tax rate. Unused concessional cap amounts carry forward for up to 5 years, provided your total super balance is below $500,000 at 30 June of the previous financial year. This "carry-forward" rule lets you contribute large lump sums in a single year — for example, after receiving a bonus or inheritance.
Non-Concessional Contributions Cap ($120,000)
Non-concessional contributions are amounts you deposit from after-tax income. These contributions attract no additional tax when entering the fund because income tax has already been paid. The annual cap is $120,000.
The "bring-forward" rule allows contributors under 75 to use up to 3 years of non-concessional cap in a single year (up to $360,000), provided total super balance is below $1.9 million at 30 June of the prior year. Exceeding the non-concessional cap results in the excess being taxed at 47% (top marginal rate plus Medicare Levy), or you can elect to withdraw the excess and pay tax at your marginal rate plus an earnings component.
Division 293 Tax for High-Income Earners
"Division 293" imposes an additional 15% tax on concessional super contributions for individuals with income plus concessional contributions exceeding $250,000. This brings the total tax on super contributions to 30% for high earners, reducing the tax advantage of superannuation. Division 293 applies to approximately 390,000 taxpayers. The ATO issues Division 293 assessments automatically after tax returns are lodged — you can pay the assessment from your super fund or from personal funds.
How Is Super Taxed?
Super is taxed at 3 distinct stages: contributions, investment earnings, and withdrawals. The combined tax treatment makes super the most tax-effective savings vehicle in Australia for retirement purposes, with rates of 15% or less at each stage compared to marginal rates up to 47%.
| Stage | Tax Rate | Details |
|---|---|---|
| Concessional contributions | 15% | Employer SG, salary sacrifice, and deductible personal contributions. Division 293 adds 15% above $250K income. |
| Non-concessional contributions | 0% | After-tax money entering super. Already taxed at your marginal rate. |
| Investment earnings (accumulation) | 15% | Fund earnings taxed at 15%. Capital gains on assets held 12+ months taxed at 10% (one-third CGT discount). |
| Investment earnings (pension phase) | 0% | Earnings on assets supporting income streams up to $1.9M transfer balance cap are tax-free. |
| Withdrawals (age 60+) | 0% | Lump sums and income streams from a taxed fund are entirely tax-free from age 60. |
| Withdrawals (preservation age to 59) | 0% up to low-rate cap | First $235,000 (FY2025-26) of taxable component is tax-free. Excess taxed at 15% plus Medicare Levy. |
The "Transfer Balance Cap" limits how much super you can move into the tax-free pension phase. The general cap is $1.9 million for FY2025-26, indexed in $100,000 increments aligned with CPI. Amounts above this cap remain in the accumulation phase where earnings are taxed at 15%. Understanding how super taxation interacts with your income tax brackets is critical — use our Take-Home Pay Calculator to model your total after-tax position.
Is There a Maximum Super Contribution Base?
The maximum super contribution base for FY2025-26 is $62,500 per quarter, equivalent to $250,000 per year. Employers are not legally required to pay the 12% SG on earnings above this threshold.
The maximum SG your employer must pay per quarter is $7,500 (12% × $62,500). This cap affects employees earning above approximately $250,000 per year. Some employers voluntarily pay super on total salary including amounts above the maximum contribution base as part of an executive remuneration package.
The maximum contribution base is indexed annually in line with Average Weekly Ordinary Time Earnings (AWOTE). For the previous year (FY2024-25), the quarterly maximum was $62,270. Use our Superannuation Calculator to determine whether the cap applies to your salary.
Step-by-Step: How to Check Your Super Balance
Every Australian with a super account can check their balance through myGov linked to the ATO, through their super fund's app or website, or by calling the fund directly. The ATO consolidates information from all funds, making myGov the single best tool for finding lost super across multiple accounts.
- Log in to myGov at my.gov.au using your credentials and link the ATO service if you have not already done so.
- Navigate to "Super" in the ATO section. The dashboard displays all super accounts the ATO knows about, including active accounts, lost super, and unclaimed money.
- Review your balances. Each account shows the fund name, ABN, account number, last reported balance, and date last updated. Employer-reported contributions appear within 2–4 weeks of the quarterly deadline.
- Consolidate accounts. If you have multiple accounts, select the accounts you want to roll over and transfer them into a single fund. Consolidation eliminates duplicate insurance premiums and administration fees, which average $553 per year per account.
- Check for unpaid super. Compare your payslips against the "Contributions" section. If employer SG payments are missing or short, lodge an "Unpaid super enquiry" through the ATO. The ATO investigates approximately 25,000 unpaid super complaints annually.
Employers must report super contributions through Single Touch Payroll (STP), which feeds directly into the ATO's system. Reviewing your super at least once per quarter ensures contributions are being paid on time and at the correct rate of 12%.
Worked Example: Super on an $85,000 Salary
An employee earning $85,000 per year in base salary (base + super structure) receives SG contributions of $10,200 for FY2025-26, bringing the total package to $95,200. Here is the complete breakdown of how super interacts with tax, take-home pay, and contribution caps.
| Component | Amount | Calculation |
|---|---|---|
| Gross salary | $85,000 | Base annual salary |
| Employer SG (12%) | $10,200 | $85,000 × 12% |
| Total package | $95,200 | $85,000 + $10,200 |
| Tax on SG inside super (15%) | $1,530 | $10,200 × 15% |
| Net SG added to super balance | $8,670 | $10,200 − $1,530 |
| Remaining concessional cap space | $19,800 | $30,000 − $10,200 |
| Income tax on $85K salary | $16,288 | $4,288 + ($85,000 − $45,000) × 30% |
| Medicare Levy (2%) | $1,700 | $85,000 × 2% |
| Take-home pay (approx.) | $67,012 | $85,000 − $16,288 − $1,700 |
If this employee salary sacrifices $5,000 into super, taxable income drops to $80,000, reducing income tax by approximately $1,500 (the $5,000 at the 30% marginal rate). The $5,000 is taxed at 15% inside super ($750), producing a net tax saving of $750. Read the full mechanics in our Salary Sacrifice Guide.
How Does Salary Sacrifice Into Super Work?
Salary sacrifice redirects a portion of your pre-tax salary into your super fund, where it is taxed at 15% instead of your marginal rate. The tax saving ranges from $150 per $1,000 sacrificed (at the 30% bracket) to $300 per $1,000 (at the 45% bracket), making it one of the most effective legal tax-reduction strategies in Australia.
Salary sacrifice contributions count toward the $30,000 concessional cap alongside employer SG payments. Exceeding the cap triggers additional tax at your marginal rate on the excess amount. Before arranging salary sacrifice with your employer, calculate your available cap space by subtracting your annual SG from $30,000.
Worked Example: Salary Sacrifice on $100,000
An employee earning $100,000 receives 12% SG ($12,000), leaving $18,000 of concessional cap space ($30,000 − $12,000). If they salary sacrifice $10,000:
- Taxable income drops from $100,000 to $90,000
- Income tax saving at the 30% marginal rate: $3,000
- The $10,000 is taxed at 15% inside super: $1,500 contributions tax
- Net benefit: $1,500 more in super than taking the income as salary
- Take-home pay reduces by approximately $7,000 ($10,000 minus the $3,000 tax saving)
Use the Salary Sacrifice Calculator to model your own scenario with exact dollar amounts.
What Changed for Super in FY2025-26?
The SG rate increased from 11.5% to 12% on 1 July 2025, marking the final scheduled increase in the legislated ramp-up from 9.5% that began in FY2021-22. This 0.5 percentage point rise adds approximately $425 per year in super contributions for every $85,000 of salary.
| Change | FY2024-25 (Previous) | FY2025-26 (Current) |
|---|---|---|
| SG rate | 11.5% | 12.0% |
| Maximum contribution base (quarterly) | $62,270 | $62,500 |
| Concessional cap | $30,000 | $30,000 (unchanged) |
| Non-concessional cap | $120,000 | $120,000 (unchanged) |
| Transfer balance cap | $1.9 million | $1.9 million (unchanged) |
| Division 293 threshold | $250,000 | $250,000 (unchanged) |
The higher SG rate means employees on a "total package" structure see a slight reduction in take-home pay, because a larger share of the package goes to super. Employees on a "base + super" structure see no change to take-home pay — only higher super contributions from their employer. The Stage 3 income tax bracket changes that took effect on 1 July 2024 continue to apply in FY2025-26, including the 16% rate on income between $18,201 and $45,000 and the expanded 30% bracket up to $135,000.
What Are the Different Types of Super Funds?
Australian super funds fall into 5 main categories: industry funds, retail funds, corporate funds, public sector funds, and self-managed super funds (SMSFs). Each type differs in fee structures, investment options, insurance offerings, and governance.
| Fund Type | Typical Fees (p.a.) | Investment Options | Best Suited For |
|---|---|---|---|
| Industry fund | 0.5%–1.0% | Pre-mixed and single-sector options | Most employees; lower fees, profit-to-member |
| Retail fund | 0.8%–1.5% | Wide range including managed funds and shares | Active investors wanting specific fund managers |
| Corporate fund | 0.3%–0.7% | Tailored options negotiated by employer | Employees of large corporations with in-house funds |
| Public sector fund | 0.3%–0.6% | Pre-mixed options, some defined benefit schemes | Federal, state, and local government employees |
| SMSF | $2,000–$5,000 fixed | Direct shares, property, crypto, collectibles | Balances above $500K; experienced investors |
Stapled Super Funds
Since 1 November 2021, when you start a new job without nominating a fund, your employer must request your "stapled fund" details from the ATO. This is your existing super fund that follows you from job to job, preventing the creation of duplicate accounts with unnecessary fees. The ATO processes approximately 2.5 million stapled fund requests per year.
Default Funds (MySuper)
If you have no existing fund and do not nominate one, your employer opens an account in their default fund. All default funds must offer a "MySuper" product — a simple, low-cost option designed for members who do not make active investment choices. MySuper products are subject to annual performance testing by APRA; funds that fail 2 consecutive years are closed to new members.
Comparing Funds
When choosing a fund, compare investment fees (target under 1% p.a.), insurance premiums, investment performance over 5–10 year periods, and available tools such as salary sacrifice tracking and retirement projections. The ATO's YourSuper comparison tool at ato.gov.au/yoursuper ranks funds by fees and net returns over 7 years.
What Are the Key Super Dates and Deadlines?
Employers must pay SG contributions quarterly, within 28 days of the end of each calendar quarter. Missing a deadline triggers the Superannuation Guarantee Charge (SGC), which includes the unpaid super, interest of 10% per annum, and a $20 per-employee administration fee.
| Quarter | Period | SG Payment Due |
|---|---|---|
| Q1 | 1 July – 30 September | 28 October |
| Q2 | 1 October – 31 December | 28 January |
| Q3 | 1 January – 31 March | 28 April |
| Q4 | 1 April – 30 June | 28 July |
Other critical super dates for FY2025-26 include: 30 June 2026 as the deadline to make personal deductible contributions for the financial year, 30 June 2026 for the carry-forward concessional cap calculation date, and 31 October 2026 (or the lodgement due date if using a tax agent) to lodge your tax return and claim deductions for personal super contributions. The ATO's Australian Tax Calendar lists all key dates across the financial year.
Frequently Asked Questions
How this calculator works▼
Information on this page is based on current ATO legislation and Superannuation Guarantee Administration Act parameters for the 2025-26 Australian financial year. Rules surrounding superannuation are subject to frequent federal updates.
Sources & References
- 1Super Guarantee percentage— Australian Taxation Office
- 2Super contribution caps— Australian Taxation Office
- 3Division 293 tax— Australian Taxation Office
- 4Super fund types and MySuper— Australian Taxation Office
Last verified: 14 March 2026. Our content is based on the latest information from official Australian government sources.
James Harrington
Verified AuthorSenior Tax & Payroll Analyst
CPA, Registered Tax Agent (25787011)
James is a CPA-qualified tax professional with over 14 years of experience in Australian taxation and payroll systems. He spent six years at the Australian Taxation Office working on PAYG withholding and individual tax return processing before moving into financial publishing. He now leads the tax content at Pay Calculator Australia, translating complex ATO legislation into clear, actionable guidance.
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