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What is the super guarantee?

The super guarantee (SG) is the percentage of your wage or salary that your employer is required to pay into your Australian superannuation fund, to go towards your retirement.

Currently, if you’re earning more than the income threshold of $450 per calendar month, your employer is required to make SG contributions to your super fund as part of your normal pay and other entitlements (not including overtime payments). Whether you're working full-time, part-time or casually, or earning shift loadings, allowances, bonuses or commissions, you should be eligible for SG contributions. 

However, if you're a high income earner, you may run into the maximum super contribution base (MSCB), meaning your employer may not be required to make SG contributions for the part of your earnings over the quarterly limit.

If you’re self-employed, you aren’t required to pay the super guarantee to yourself. While this could potentially increase how much money you bring home, it could also affect your future retirement income.

If you're unsure whether your employer is required to pay you SG contributions, or if you should be paying yourself the super guarantee, the Australian Taxation Office (ATO) has tools available to help check your eligibility

What is the current super guarantee rate?

As of 1 July 2021, the current super guarantee rate is 10 per cent of your ordinary time earnings (OTE) for your ordinary hours of work. This means that your employer is required to pay 10% of your pre-tax income into a superannuation fund on your behalf – if you don’t nominate your own super account, one will be created for you with your lender’s default super fund.

To help ensure that your SG contributions will be enough to effectively build a healthy super balance for retirement so you can be less reliant on an age pension, the superannuation guarantee rate is scheduled to increase at regular intervals in the future:

Super Guarantee rate increases

Period General super guarantee (%)
1 July 2002 – 30 June 20139.00
1 July 2013 – 30 June 20149.25
1 July 2014 – 30 June 20219.50
1 July 2021 – 30 June 202210.00
1 July 2022 – 30 June 202310.50
1 July 2023 – 30 June 202411.00
1 July 2024 – 30 June 202511.50
1 July 2025 – 30 June 2026 and onwards12.00

Source: ATO

When should your employer pay the super guarantee?

According to the ATO, employers must make super guarantee contributions on at least a quarterly basis:

QuarterPeriod
1 July - 30 September 
1 October - 31 December 
1 January - 31 March
41 April - 30 June

What is the super guarantee charge?

If you’re an employer and you miss making super guarantee contributions for your employees on time, you’ll need to lodge a super guarantee charge (SGC) statement and pay a SGC to the ATO.

What is the super guarantee charge rate?

According to the ATO, the superannuation guarantee charge is made up of:

  • the super guarantee shortfall, made up of:
    • super calculated on salary and wages (including any overtime)
    • any choice liability, based on the shortfall and capped at $500
  • nominal interest of 10% per annum (accrues from the start of the relevant quarter)
  • an administration fee of $20 per employee, per quarter.

The ATO website offers calculators and related tools to help employers work out their SGC.

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Can you make additional contributions to your superannuation?

If you want to put more money into your super than the SG contribution rate, to help enjoy an improved retirement income or to save for another purpose such as buying your first home with the First Home Super Saver (FHSS) Scheme, you can do so by making voluntary contributions out of your pre-tax or after-tax income.  

Pre-tax contributions

You can arrange for your employer to pay extra money into your super out of your pre-tax income. Also known as a salary sacrifice, this means the money goes straight from your employer into your super fund, and never passes through your bank account.

While this can reduce how much money you take home, it may increase your super balance quickly. Additionally, you may pay a lower tax rate on these concessional contributions.

After-tax contributions

An after tax super contribution, also known as a non-concessional contribution, is where you pay a lump sum from your bank account into your super fund, out of money you’ve already paid tax on.

You may be able to claim after-tax personal contributions to your super as tax deductions when completing your tax return.

Are there any super contribution limits?

The ATO limits the maximum amount an individual can contribute to their super each financial year before they start being taxed differently. These contribution caps may change from year to year, so it’s important to check the ATO for most accurate current caps.

From 1 July 2021, the general concessional contributions cap is $27,500 for all individuals regardless of age.

From 1 July 2021, the non-concessional contributions cap increased from $100,000 to $110,000. Members under 65 years of age may be able to make non-concessional contributions of up to three times the annual non-concessional contributions cap in a single year.

If eligible, when you make contributions greater than the annual cap, you automatically gain access to future year caps - the ‘bring-forward’ option.

What are reportable superannuation contributions?

For employees, there are two types of reportable superannuation contributions:

  • Reportable employer super contributions your employer makes for you
  • Personal deductible contributions you make for yourself

Can I transfer money from overseas into my superannuation account?

Yes, you can transfer money from overseas into your superannuation account – under certain conditions. First, you must provide your tax file number to your fund. Second, if you are aged between 65 and 74, you must have worked at least 40 hours within 30 consecutive days in a financial year. (Australians under 65 aren’t subject to a work test; Australians aged 75 and over cannot receive contributions to their superannuation account.)

Money transferred from overseas will generally count to both your concessional contributions limit and your non-concessional contributions limit. You will have to pay income tax on the applicable fund earnings component of any money transferred from overseas. You might also be liable for excess contributions tax.

What are reportable employer superannuation contributions?

Reportable employer superannuation contributions are special contributions that an employer makes on top of the regular compulsory contributions. One example would be contributions made as part of a salary sacrifice arrangement.

What are personal contributions?

A personal contribution is when you make an extra payment into your superannuation account. The difference between personal contributions and salary sacrifices is that the former comes out of your after-tax income, while the latter comes out of your pre-tax income.

What is salary sacrificing?

A salary sacrifice is where your employer takes part of your pre-tax salary and pays it directly into your superannuation account. Salary sacrifices come out of your pre-tax income, whereas personal contributions come out of your after-tax income.

This article was reviewed by Personal Finance Editor Alex Ritchie before it was published as part of RateCity's Fact Check process.