Payroll & super
SG
The Super Guarantee (SG) is the minimum superannuation contribution employers must pay for employees, set at 12% from 1 July 2025 (the final legislated rate). From 1 July 2026, payday super requires contributions each payday, received by the employee's fund within 7 business days, replacing the old quarterly cycle.
Employers must contribute a minimum percentage of each eligible employee's earnings to a complying super fund. The rate climbed 0.5% a year from 9.5% and reached its final legislated level of 12% on 1 July 2025. There is no $450-a-month minimum earnings threshold (abolished 1 July 2022), so almost every employee is covered from the first dollar, including many contractors paid mainly for their labour, who are employees for SG purposes even with an ABN.
For FY2025-26 the SG base was Ordinary Time Earnings (OTE), capped at a maximum contribution base of $62,500 per quarter, with contributions due 28 days after each quarter end. From 1 July 2026, payday super changes the mechanics: SG is calculated on Qualifying Earnings (OTE plus all commissions plus salary-sacrificed super amounts) every payday, and the contribution must be received by the fund within 7 business days of payday (20 business days for a new employee's first contribution). The quarterly maximum base is replaced by an annual one, $270,830 for 2026-27. The ATO super for employers guide covers eligibility and payment rules.
Late or underpaid super is one of the most expensive mistakes a small employer can make. Missing the deadline triggers the Super Guarantee Charge (SGC): the shortfall calculated on a broader earnings base than OTE, plus interest and an administration component, with strict lodgement obligations on top. Historically the SGC was entirely non-deductible, turning a timing slip into a real cost multiplier. Under payday super the ATO detects late payment quickly, because Single Touch Payroll reports what you owed each payday and funds report what actually arrived.
The practical implications for 2026-27: super is now a per-pay-run cash-flow item, not a quarterly one you can float. Payroll software needs to send contributions through SuperStream at, or immediately after, each pay run, and the old habit of sweeping a quarter's super in the last week before the 28th no longer works. Budget for it the way you budget for wages: an employee on $1,500 a week of qualifying earnings costs $180 a week in super, roughly $9,360 a year, on top of gross wages. Model total employment costs with the OneBookPlus employer cost calculator and check individual entitlements with the superannuation guarantee calculator.
| Item | FY2025-26 | FY2026-27 |
|---|---|---|
| SG rate | 12% | 12% (no further rises scheduled) |
| Earnings base | Ordinary Time Earnings (OTE) | Qualifying Earnings (OTE + all commissions + salary-sacrificed super) |
| Payment deadline | 28 days after each quarter | Received by fund within 7 business days of payday |
| Maximum contribution base | $62,500 per quarter | $270,830 per year |
| Concessional contributions cap | $30,000 | $32,500 |
Two details worth flagging: salary sacrifice no longer reduces the SG base (sacrificed super counts as Qualifying Earnings, continuing the rule that has applied since 2020), and the deadline is about when the fund receives the money, not when you send it, so clearing-house processing time is your risk. Figures are published on the ATO key superannuation rates and thresholds page.
The definitions above only get you so far; the free OneBookPlus superannuation guarantee calculator turns them into your own figures in seconds, no sign-up needed.
Often yes. A contractor paid wholly or principally for their labour under a contract with them personally is an employee for SG purposes, even if they quote an ABN and invoice you. The test looks at the substance of the arrangement, not the paperwork. If in doubt, use the ATO's employee or contractor decision tool, because the SGC applies retrospectively when you get it wrong.
Under payday super, a contribution that has not reached the fund within 7 business days of payday creates a Super Guarantee Charge liability: the shortfall plus notional interest and an administrative uplift. There is no discretion to waive the timing rule, so build the transfer time of your clearing house or payroll software into your pay-run process.
Yes. The legislated schedule of 0.5% annual increases ended when the rate reached 12% on 1 July 2025, and no further increases are scheduled. Future changes would need new legislation. The related caps still move: the concessional contributions cap rose from $30,000 to $32,500 on 1 July 2026 through indexation.
Last reviewed and updated: by Bishal Shrestha