This article gives you the lowdown on the Superannuation Guarantee (SG)—from how to calculate it to making sure you meet those all-important deadlines. Plus, it offers tips on staying compliant and avoiding any super-related slip-ups.
What is the Superannuation Guarantee (SG)?
The Superannuation Guarantee (SG) is the amount of super you are required to contribute to your employee’s super fund each quarter.
How is the Superannuation Guarantee Calculated?
Calculating the SG is straightforward. The amount you need to pay each quarter is an employee’s total ordinary time earnings (OTE) for the quarter, multiplied by the current SG rate.
For the 2025 financial year, the SG rate is 11.5%, and it will increase to 12% in the 2026 financial year.
What are Ordinary Time Earnings?
Ordinary Time Earnings (OTE) include what an employee earns for their normal hours of work, such as:
- Salary and wages for ordinary hours
- Bonuses and commissions
- Allowances
- Most paid leave, including annual leave and personal leave
Typically, overtime and any allowances paid to an employee while they aren’t at work (such as an on-call allowance) aren’t considered OTE and therefore don’t require super contributions.
Who is an Employee for Superannuation Purposes?
Under superannuation law, the definition of an employee includes:
- Employees
- Independent contractors (typically sole traders) who are engaged under a contract that is wholly or principally for their labour
When is Super Due?
As an employer, you must pay your employees’ SG in full on a quarterly basis. Here are the key dates to remember:
Quarter | Payment Due Date |
1 July – 30 September | 28 October |
1 October – 31 December | 28 January |
1 January – 31 March | 28 April |
1 April – 30 June | 28 July |
What Happens if I Miss the Due Date?
If you miss the due date for paying an employee’s superannuation guarantee, you are required to lodge a Superannuation Guarantee Charge (SGC) Statement with the ATO. The SGC Statement includes several penalties:
- The super owed to the employee is calculated on the total salary and wages paid for the quarter, not just ordinary time earnings.
- A 10% nominal interest charge is applied, which is paid to the employee’s super fund to compensate for a loss of earnings on their super (accrues from the start of the relevant quarter until you lodge the SGC statement with the ATO).
- A $20 administration fee is payable to the ATO for each employee on the SGC statement.
- You are no longer able to claim a tax deduction for the super paid.
Can PAL Help Me?
Absolutely! Our dedicated team can help you manage your superannuation payments each quarter, ensuring the correct amount of super guarantee is calculated and paid in full before the due date.
If you’ve accidentally missed a super payment, reach out, as we can help get you back on track.
Have a question or comment?
If you have any questions or comments relating to this article (or any other accounting matter) please get in touch with us at [email protected] and we’ll be happy to assist you.
