Key takeaways
5Superannuation (super) is Australia's compulsory retirement savings system. As an employer, you're legally required to pay a percentage of each eligible employee's earnings into a super fund. These contributions build up over the employee's working life and become accessible when they retire.
It's not optional, it's not a perk, and getting it wrong carries serious penalties.
As of 1 July 2025, the Super Guarantee (SG) rate is 12% of an employee's ordinary time earnings (OTE). This rate applies to all eligible employees regardless of how much they earn.
The SG rate has been gradually increasing over the past several years:
| Financial Year | SG Rate |
|---|---|
| 2023-24 | 11.0% |
| 2024-25 | 11.5% |
| 2025-26 | 12.0% |
The rate is now at its legislated ceiling of 12%.
You must pay super for any worker who is your employee (not a contractor) and earns $450 or more in a calendar month. However, from 1 July 2024, the $450 monthly threshold was removed entirely — meaning you must now pay super on every dollar of ordinary time earnings for eligible employees, regardless of how little they earn.
The distinction between employee and contractor is one of the most contested areas in Australian employment law. The ATO looks at the whole arrangement, including:
If in doubt, treat the worker as an employee for super purposes. The consequences of underpaying super are far worse than overpaying it.
Super is calculated on ordinary time earnings, which includes:
OTE does not include:
Super contributions must be received by the employee's super fund by the quarterly due date — not just sent, but received.
| Quarter | Period | Due Date |
|---|---|---|
| Q1 | 1 Jul – 30 Sep | 28 October |
| Q2 | 1 Oct – 31 Dec | 28 January |
| Q3 | 1 Jan – 31 Mar | 28 April |
| Q4 | 1 Apr – 30 Jun | 28 July |
Important: These dates are firm. If the 28th falls on a weekend or public holiday, the payment must be received by the preceding business day — not the following one. Plan ahead and allow processing time.
Every employer must have a default super fund — the fund you pay into when an employee doesn't choose their own. Since 1 November 2021, you must first check with the ATO whether a new employee has an existing "stapled super fund" before using your default.
Your default fund must be a MySuper product — a simple, low-cost super option designed for people who don't actively choose a fund.
You can't simply transfer money to a super fund's bank account. Super contributions must be made through SuperStream — the ATO's standardised electronic system.
Options for making SuperStream-compliant payments:
The ATO's free clearing house is the easiest option for most small businesses. You make one payment to the clearing house, and it distributes the money to each employee's fund.
The ATO takes super compliance seriously. If you miss a deadline, you'll face the Super Guarantee Charge (SGC), which includes:
The SGC is not tax-deductible, unlike regular super contributions which are. This means late payment costs you significantly more than on-time payment.
In serious cases, the ATO can also impose additional penalties of up to 200% of the SGC amount, and directors can face personal liability.
You must keep records of:
Keep these records for at least five years after they're created.
The ATO's data-matching systems cross-reference employer payment data with super fund receipt data. Late payments are detected automatically.
Super is calculated on gross ordinary time earnings, not on what the employee takes home after tax.
If an employee leaves mid-quarter, you still owe super on their earnings for the period they worked. Pay it by the quarterly deadline.
Since November 2021, you must check for a stapled fund before defaulting to your own fund. Failure to do so can result in multiple unnecessary accounts for the employee and regulatory scrutiny.
Managing super obligations is one of the most stressful parts of being an employer. OneBookPlus simplifies the process by helping you track employee earnings and calculate super obligations accurately.
With OneBookPlus, you can:
Stay compliant without the spreadsheet headaches. Sign up for free and take control of your employer obligations.
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