Alex is Sprintlaw’s co-founder and principal lawyer. Alex previously worked at a top-tier firm as a lawyer specialising in technology and media contracts, and founded a digital agency which he sold in 2015.
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Superannuation is a core part of employment in Australia. As an employer, getting super right isn’t just ticking a compliance box - it’s about paying people correctly, avoiding costly penalties, and building trust with your team.
That said, the rules do change. From stapled funds to SuperStream and evolving Super Guarantee (SG) rates, there are a few moving parts to stay across. This guide breaks down who you need to pay, how much and when, the systems to set up, and what to do if something goes wrong.
Whether you’re hiring your first employee or reviewing your payroll processes, use this as your practical roadmap to employer superannuation obligations in Australia.
What Are Your Employer Superannuation Obligations?
If you employ staff in Australia, you’ll almost certainly have to pay superannuation on their behalf under the Superannuation Guarantee (Administration) Act 1992. In simple terms, you need to contribute a minimum percentage of each eligible worker’s ordinary time earnings (OTE) to a complying super fund.
- Current SG rate: 11.5% (from 1 July 2024). The rate is scheduled to increase to 12% from 1 July 2025.
- Who you pay: Most employees and, in some cases, contractors who are paid mainly for their labour (explained below).
- How you pay: Electronically via SuperStream to each worker’s chosen or stapled super fund by the due dates.
Super is separate to wages or salary. You pay it on top, and you must keep accurate records of calculations, fund details and contributions for at least five years.
Who Must Receive Superannuation?
Super entitlement is broad. If in doubt, check eligibility early and document your decision.
- Employees aged 18 and over: Generally entitled to super regardless of hours worked.
- Employees under 18: Entitled if they work more than 30 hours in a week.
- Full-time, part-time and casual: All employment types are usually covered (subject to the under-18 rule).
- Temporary residents: Usually entitled while working in Australia.
- Directors receiving payments for their labour: Typically covered.
- Contractors “paid mainly for their labour”: You may need to pay super even if they have an ABN and invoice you. This turns on the extended definition of “employee” for SG purposes (e.g. paid for personal labour and skills, paid by time not by result, and can’t delegate the work).
There’s no minimum monthly earnings threshold for SG eligibility anymore (the former $450 per month threshold was removed). If you’re unsure about contractor status or mixed arrangements, it’s worth getting advice early - misclassification can be expensive to unwind.
How Much Do You Have To Pay And On What Earnings?
You pay the Super Guarantee on an employee’s ordinary time earnings. Getting OTE right is crucial to avoid underpayments.
- Ordinary Time Earnings (OTE): Generally includes base salary or wages, shift loadings, allowances that relate to ordinary hours, commissions and some bonuses. It does not include overtime payments. For a deeper dive into OTE, see Ordinary Time Earnings.
- Bonuses: Whether SG applies can depend on the nature of the bonus (e.g. tied to ordinary hours versus extraordinary performance). For common scenarios, check superannuation on bonuses.
- Termination payments: Some components attract SG and others don’t. This often includes questions around unused leave, redundancy and payment in lieu of notice. For the broader picture, see super on termination payments.
Calculate SG at 11.5% on OTE for each pay cycle (or at least each quarter), then contribute to the employee’s fund by the due date. If your payroll system supports it, calculating and paying super each pay run helps reduce end-of-quarter surprises.
When And How Do You Pay Superannuation?
SG contributions must be paid at least quarterly by the statutory deadlines. Many employers choose to pay monthly or per pay run to stay on track.
Quarterly Due Dates
- 1 July – 30 September: due by 28 October
- 1 October – 31 December: due by 28 January
- 1 January – 31 March: due by 28 April
- 1 April – 30 June: due by 28 July
Payments must reach the fund by the due date (not just be initiated). Missing a deadline, even by a few days, can trigger the Superannuation Guarantee Charge (SGC).
Stapled Funds And Choice Of Fund
- Standard Choice Form: When a new employee starts, give them a choice of fund form so they can nominate their preferred fund.
- Stapled fund check: If they don’t choose a fund, you must request their stapled fund (a fund “stapled” to the employee) from the ATO and pay contributions there. Only use your default fund if the ATO advises no stapled fund exists.
This stapled fund step has been mandatory since 1 November 2021. Build it into your onboarding checklist so nothing is missed.
SuperStream Is Mandatory
The ATO requires employers to send super contributions and data electronically using SuperStream. Most payroll and clearing house solutions are SuperStream compliant - confirm your software is set up correctly so contributions and data arrive together, on time.
“Payday Super” Is Coming
The Australian Government has announced that from 1 July 2026, employers will need to pay SG on payday (rather than quarterly). While that change isn’t in force yet, moving to per-pay-cycle super now is a smart way to future-proof your processes.
Set-Up Checklist, Policies And Contracts
Strong systems make SG compliance straightforward. Here’s a practical setup checklist:
- Onboarding: Collect tax and super details, issue a Standard Choice Form, and check for a stapled fund if no choice is provided.
- Payroll settings: Confirm SG rate, OTE classifications and SuperStream connectivity in your payroll software.
- Payment cadence: Decide whether you’ll pay super each pay run or monthly. Build calendar reminders ahead of each quarterly due date if you’re not paying per pay.
- Records: Keep fund choices, contribution calculations, remittance reports and receipts for at least five years.
- Audit trail: Ensure you can prove when contributions were sent and received by funds.
It also helps to reflect super clearly in your documents and internal policies:
- Employment Contract: State whether salary is exclusive or inclusive of super, confirm the SG rate is paid on OTE, and set out how fund choice is handled.
- Workplace Policy: A short payroll or super policy can outline onboarding steps (choice of fund, stapled fund checks), payment timing and record-keeping expectations for your team.
Clarity in contracts and policies reduces payroll errors and helps new managers follow the process consistently.
Staying Compliant: Common Pitfalls, Penalties And How To Rectify Them
Common Pitfalls We See
- Missing due dates: Contributions arrive after the fund’s deadline (for example, bank cut-off delays). Aim to send contributions well before the 28th to allow for processing.
- Incorrect OTE setup: Allowances or bonuses are incorrectly excluded (or included). Revisit your OTE mapping in payroll and sense-check it against current ATO guidance and your industrial instrument.
- Ignoring contractor SG: Assuming “ABN = no super” is a classic error. Assess whether the contractor is paid mainly for their labour under the SG rules.
- Skipping the stapled fund step: Paying to your default fund without checking for a stapled fund can lead to non-compliance.
- Inadequate records: Not keeping remittance details and fund receipts makes it hard to prove you paid on time.
What Happens If You Pay Late Or Underpay?
If you miss a deadline or underpay, you may have to lodge a Superannuation Guarantee Charge (SGC) statement with the ATO. The SGC is not the same as ordinary contributions and can cost more because it includes:
- SG shortfall amounts calculated on salary and wages (which can be broader than OTE),
- Nominal interest (accruing from the start of the quarter), and
- An administration fee per employee, per quarter.
Importantly, once you’re late, simply paying the missed super to the fund won’t fix the issue by itself - you still need to lodge the SGC statement. Rectify errors as soon as possible to limit interest and penalties.
Practical Ways To Stay On Top Of SG
- Automate where possible: Use payroll software that calculates SG on OTE and submits via SuperStream.
- Reconcile each pay run: If you pay super per pay, reconcile your clearing house reports to payroll for a clean audit trail.
- Schedule reminders: Add calendar reminders a week before each quarterly due date if you don’t pay per pay run.
- Train your payroll team: Make sure anyone processing payroll understands OTE, stapled funds and due dates.
- Review annually: Check your payroll classifications and SG settings at the start of each financial year (as SG rates or awards may change).
Finally, super interacts with tax and payroll in nuanced ways. For questions about calculations, fringe cases and payroll configuration, speak with your accountant or the ATO. For contracts, policies and risk management, our team can help you set up the right documentation.
If your business is facing related employment changes (for example, redundancies or notice), super may be impacted by the components you pay - the articles on super on termination payments and payment in lieu of notice are a good place to start before you finalise any payouts.
Key Takeaways
- Most Australian employees, and some contractors paid mainly for their labour, are entitled to Super Guarantee contributions on top of wages.
- From 1 July 2024 the SG rate is 11.5%, calculated on Ordinary Time Earnings; be careful with allowances, bonuses and termination components.
- Pay super at least quarterly by the due dates via SuperStream. If an employee doesn’t choose a fund, you must request and use their ATO-stapled fund.
- Late or incorrect payments can trigger the Superannuation Guarantee Charge - fix issues quickly and lodge the required SGC statement.
- Build compliance into onboarding, payroll settings and internal policies, and make super terms clear in your Employment Contract.
- For detailed payroll and tax questions, check with your accountant or the ATO. For contracts, policies and compliance processes, our lawyers can help you set things up the right way.
If you would like a consultation on your employer superannuation obligations, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.
