Superannuation in Australia: A Comprehensive Guide for Employees and Employers

Payroll Compliance•7 min read•By Single Touch Plus Team•Published on April 29, 2025

Superannuation, often simply called "super," is Australia's system for providing income in retirement. It's a crucial component of financial planning for individuals and a significant responsibility for employers. This post will delve into the intricacies of superannuation, covering how it's calculated, employer obligations, payment requirements, upcoming changes, and essential considerations for employees.

How is Superannuation Calculated?

The current superannuation guarantee (SG) rate in Australia is 11.5% of an employee's ordinary time earnings (OTE). OTE generally includes salary, wages, commissions, bonuses and allowances, but it does not typically include overtime payments.

Here's a simple example:

Imagine Sarah earns a base salary of $80,000 per year. Her employer is required to contribute 11.5% of this amount to her superannuation fund.

Annual superannuation contribution = 11.5% of $80,000 = $9,200.

This contribution is paid by the employer in addition to the employee's salary or wages.

It's important to note that there's a maximum contribution base that limits the amount of OTE on which superannuation can be calculated. For the 2024-25 financial year, this limit is $65,070 per quarter. If an employee earns more than this amount in a quarter, the SG contribution is only calculated on the maximum contribution base.

Reporting Obligations for Employers

Employers in Australia have several key reporting obligations related to superannuation:

Reporting Superannuation Liability: Employers must accurately track their superannuation liability for each employee, including the correct SG amount based on their OTE.
Providing Payslips: Payslips must clearly show the amount of superannuation contributed for each pay period and the name of the superannuation fund to which the contributions were made.
Single Touch Payroll (STP): Most employers are required to report superannuation information to the Australian Taxation Office (ATO) through STP as part of their regular payroll process, giving the ATO near-real-time data on super contributions.
Superannuation Guarantee Charge (SGC) Statement: If an employer fails to pay the SG on time and in full, they may be liable for the SGC, which involves lodging an SGC statement with the ATO that includes the unpaid superannuation, interest and an administration fee.

Payment Requirements for Employers

Employers are legally obligated to make SG contributions for eligible employees at least four times a year according to the following quarterly deadlines:

Quarter	Period Covered	Payment Due Date
1	1 July – 30 September	28 October
2	1 October – 31 December	28 January
3	1 January – 31 March	28 April
4	1 April – 30 June	28 July

If any of these dates fall on a weekend or public holiday, the payment due date is the next business day. Contributions must be received by the employee's chosen fund by these deadlines, not merely sent.

Employees have the right to choose their own superannuation fund. If an employee doesn't nominate a fund, the employer must contribute to a "stapled super fund" (an existing fund linked to the employee by the ATO) or to a default fund chosen by the employer.

Future Changes to Superannuation

The superannuation landscape in Australia continues to evolve:

Scheduled Increase to the SG Rate: The SG rate is legislated to rise from 11.5% to 12% on 1 July 2025.
Focus on the Retirement Income Covenant: The Retirement Income Covenant requires superannuation trustees to develop a retirement-income strategy for members, spurring the development of new retirement-focused products and advice services.
Ongoing Legislative Amendments: Superannuation laws and regulations are periodically reviewed and updated, so employers and employees should stay informed to remain compliant.

What Employees Should Look Out For

As an employee, be proactive to ensure a comfortable retirement:

Check Your Payslips: Confirm that your employer is making the correct super contributions and that they are paid to your chosen fund.
Understand Your Fund's Fees and Performance: Monitor your fund's fees and long-term investment returns; high fees can erode savings.
Consider Consolidating Your Super Funds: Combining multiple accounts can reduce fees, though you should consider insurance implications.
Review Your Insurance within Super: Assess the level and suitability of default life, TPD and income-protection cover offered by your fund.
Nominate a Beneficiary: Keep beneficiary nominations up to date to ensure benefits are distributed according to your wishes.
Engage with Your Super Fund: Use your fund's online tools, education resources and advice services.
Understand Contribution Options: Voluntary contributions—such as salary-sacrifice or after-tax payments—can be tax-effective ways to boost savings.
Keep Your Details Up to Date: Ensure your fund has your current contact details to receive important information.