1.3 Super Guarantee (SG) rates

Australian law requires all employers to provide a minimum level of superannuation for their employees at the prevailing Super Guarantee (SG) rate, based on the employee's ordinary time earnings (OTE), which must be paid to a complying super fund.

The SG payment rate was legislated to increase to 12% on 1 July 2025:

Super Guarantee rates

Source: Rainmaker Technical Services 2025

Salary sacrifice contribution cannot be considered part of a super guarantee contribution 

From 1 January 2020, a salary sacrifice contribution could no longer be considered part of a super guarantee contribution made by the employer. For instance, if an employee elects to salary sacrifice 5% into their superannuation fund, the employer will still be required to pay the prevailing SG rate of the employee's ordinary time earnings (OTE) base, into the employee's super fund to avoid the super guarantee charge.

This technical resource is intended for the use of financial advisers only. It is current at the date of publication but may be subject to change. This publication has been prepared without taking into account a potential investor's objectives, financial situation, needs or objectives. Before making a recommendation based on this material, you should consider its appropriateness based on the client's objectives, financial situation and needs. Rainmaker Group is not a registered tax agent under the Tax Agent Services Act 2009. Your client should refer to a registered tax agent before relying on information published herein that may impact their tax obligations, liabilities or entitlements.

1.4 Timing of SG contributions & the Superannuation Guarantee Charge (SGC)

A contribution must be made no later than 28 days after the end of each quarter^, as shown in the following table.

Payday Super
From 1 July 2026, employers will be obligated to pay superannuation guarantee (SG) on behalf of their employees on the same day as salary and wages instead of the current quarterly payment sequence.

Under payday super, the due date for SG payments will be seven days from when an ordinary times earning (OTE) payment is made. That is, employers have seven days from an employee's payday for their SG to be received by their superannuation fund.

This provides time for the movement of funds through the payment system, including clearing houses. An employer will become liable for the new SG charge unless the SG contributions are received by their employees' superannuation fund within seven calendar days of payday.
The only exceptions are for new employees whose due date will be after their first two weeks of employment, and for small and irregular payments that occur outside the employee's ordinary pay cycle.

The Superannuation Guarantee Charge (SGC)

Employers who do not pay superannuation contributions for an employee for a quarter are liable to pay a penalty via the superannuation guarantee charge. The charge (not tax-deductible) is made up of:

• SG shortfall amounts based on the employee's AWOTE plus overtime
• Interest on the amount (at 10%)
• An administration fee of $20 per employee, per quarter

This technical resource is intended for the use of financial advisers only. It is current as at the date of publication but may be subject to change. This publication has been prepared without taking into account a potential investor's objectives, financial situation, needs or objectives. Before making a recommendation based on this material, you should consider its appropriateness based on the client's objectives, financial situation and needs. Rainmaker Group is not a registered tax agent under the Tax Agent Services Act 2009. Your client should refer to a registered tax agent before relying on information published herein that may impact their tax obligations, liabilities or entitlements.

1.5 Maximum super contributions base

The maximum super contributions base is used to determine the maximum limit on any individual employee's earnings base for each quarter of any financial year.

Employers do not have to make SG contributions for the part of earnings above this limit:

The maximum super contributions base is indexed in line with AWOTE each income year.

Source: Rainmaker Technical Services

1.6 Employment related payments (ETP)

What is an ETP?
When you leave work or change jobs, you may receive several lump sum payments. The tax you pay on these lump sum amounts is different to the tax you pay on your normal income. One lump sum may be an employment termination payment (ETP).

Genuine redundancy and early retirement scheme payments

Employment Termination Payments (ETP)

ETP Cap

*Includes Medicare levy and an ETP must generally be made within 12 months of terminating employment in order to qualify for lower tax rates