Superannuation guarantee explained

How the superannuation guarantee (SG) works.

As an employer, you must pay at least 9.5% of your employees’ Ordinary Time Earnings (OTE) into superannuation.

These compulsory payments are called superannuation guarantee (SG) contributions.


Superannuation guarantee rate increases

Government legislation states that the SG rate will remain at 9.5% until June 2021, increasing to 10% from July 2021, and eventually to 12% from July 2025.

The table below outlines the timeframe for the SG increase.

Financial year

SG rate %

2015/21

9.5%

2021/22

10.0%

2022/23

10.5%

2023/24

11.0%

2024/25

11.5%

2025/26 and onwards

12.0%

How to calculate SG

SG contribution = OTE x SG contribution rate (9.5%)

OTE includes

OTE doesn’t include

  • Ordinary hours of work
  • Over-award payments, shift loading, commissions
  • Payments for leave taken
  • Certain commissions and bonuses
  • Shift loading
  • Payments for unused sick leave
  • Payments for leave upon termination
  • Unused annual leave payments
  • Unused long service leave payments
  • Overtime payments
  • Reimbursement of expenses
  • Leave loading
  • Parental and eligible community leave such as jury service

The maximum contribution base in 2017/18 is $52,760 per quarter. However, you can make super contributions above this amount if you wish.

For more information on OTE, please contact your account consultant.


Exclusions for SG contributions

You are not required to pay SG for your employees who are paid less than $450 per calendar month.

 

How the superannuation guarantee (SG) works.

As an employer, you must pay at least 9.5% of your employees’ Ordinary Time Earnings (OTE) into superannuation.

These compulsory payments are called superannuation guarantee (SG) contributions.


Superannuation guarantee rate increases

Government legislation states that the SG rate will remain at 9.5% until June 2021, increasing to 10% from July 2021, and eventually to 12% from July 2025.

The table below outlines the timeframe for the SG increase.

Financial year

SG rate %

2015/21

9.5%

2021/22

10.0%

2022/23

10.5%

2023/24

11.0%

2024/25

11.5%

2025/26 and onwards

12.0%

How to calculate SG

SG contribution = OTE x SG contribution rate (9.5%)

OTE includes

OTE doesn’t include

  • Ordinary hours of work
  • Over-award payments, shift loading, commissions
  • Payments for leave taken
  • Certain commissions and bonuses
  • Shift loading
  • Payments for unused sick leave
  • Payments for leave upon termination
  • Unused annual leave payments
  • Unused long service leave payments
  • Overtime payments
  • Reimbursement of expenses
  • Leave loading
  • Parental and eligible community leave such as jury service

The maximum contribution base in 2017/18 is $52,760 per quarter. However, you can make super contributions above this amount if you wish.

For more information on OTE, please contact your account consultant.


Exclusions for SG contributions

You are not required to pay SG for your employees who are paid less than $450 per calendar month.