Is Superannuation Included In Salary? Employer’s Compliance Guide

Navigating pay requirements for employees in Australia can feel complex - especially when it comes to superannuation. If you’re setting up your payroll, reviewing your employment contracts, or preparing to onboard staff, you’ll almost certainly ask: is superannuation included in salary?

Getting this right matters. Super is tightly regulated in Australia and mistakes can be costly and time-consuming to fix. With clear wording in your contracts and the right payroll settings, you can avoid common pitfalls, stay compliant and build trust with your team.

In this guide, we’ll explain when super is included in salary, how to structure “package” versus “plus super” offers, and the practical steps to build compliant payroll processes. If you’d like tailored help, our employment lawyers can support you with contracts, policies and compliance.

What Is Superannuation And How It Works For Employers

Superannuation (super) is Australia’s retirement savings system. As an employer, you must contribute a minimum percentage of each eligible employee’s ordinary time earnings (OTE) into their super fund.

The Superannuation Guarantee (SG) rate is 11.5% from 1 July 2024, and is legislated to increase to 12% from 1 July 2025. You need to calculate SG on the right earnings base - most commonly OTE. If you’re unsure what counts as OTE in your business, this breakdown of ordinary time earnings is a helpful starting point.

Why does the “included or not” question matter? Because the way you describe the salary in an offer or contract (and set up your payroll) determines how much goes to wages and how much goes to super - and whether you’re meeting the legal minimum.

Is Superannuation Included In Salary In Australia?

It depends entirely on how you word the remuneration in your offer and contract.

• “Plus super” salary: If you offer $80,000 plus super, you pay super on top of the $80,000. At 11.5%, the super contribution is $9,200, bringing total remuneration to $89,200.
• “Inclusive” or “total package” salary: If you offer $80,000 inclusive of super, the super is carved out of that total. To work out the base wage, divide the package by 1.115. In this example, base wages are about $71,753 and super is about $8,247 (totaling $80,000).

In short: superannuation is only included in salary if you clearly state the figure is “inclusive” or a “total package”. If you say “plus super”, super must be paid on top of the base salary.

Base Salary Vs Total Package: How To Word Offers And Contracts

By default, “base salary” refers to gross wages before superannuation and other benefits. Unless your contract clearly says the figure is inclusive, super must be paid in addition to base salary.

To avoid confusion, use clear wording in all job ads, offer letters and contracts. Here are two safe approaches you can adapt:

• Base salary plus super: “You will be paid an annual salary of $65,000 plus your applicable superannuation contributions.”
• Total package (inclusive): “You will be paid a total fixed remuneration of $80,000 inclusive of mandatory superannuation contributions.”

It’s a good idea to also state when super is paid (usually quarterly), note the applicable SG rate, and confirm whether the employee can choose their fund (including stapled fund processes). If you’re refreshing your templates, consider a tailored Employment Contract to lock in the right language for your business.

Payroll And Compliance: Meeting Your Superannuation Obligations

1) Calculate Super On The Correct Earnings

Super is generally calculated on OTE, which usually includes ordinary hours worked, paid leave and some allowances, but not overtime. The details matter, so cross-check your payroll categories against the rules for ordinary time earnings.

Bonuses can be tricky. Some bonuses attract SG and others don’t. To avoid underpayments, review how you treat incentives and refer to this overview of superannuation on bonuses.

2) Respect the Current SG Rate (And Future Increases)

• 11.5% from 1 July 2024: Make sure your payroll is updated.
• Planned increase to 12% from 1 July 2025: If you use “inclusive” packages, review those offers to ensure the super portion still meets the minimum when the rate changes.

3) Payment Due Dates And The SG Charge

Super is generally due quarterly by the 28th day after each quarter ends (28 October, 28 January, 28 April and 28 July). If you pay late, you may have to lodge and pay the Superannuation Guarantee Charge (SGC), which includes interest and administration fees - and SGC is not tax deductible.

4) Choice Of Fund And Stapled Super

New employees can usually nominate their preferred fund. If they don’t, you need to check for a stapled fund (a fund linked to the employee) before contributing to your default fund. Build this into your onboarding process so contributions go to the right place from the outset.

5) Record-Keeping And Payslips

Under the Fair Work Act and Fair Work Regulations, you must keep accurate payroll records and issue payslips that show the required details, including super contributions. This protects both you and your team and helps you resolve questions quickly.

6) Employees, Casuals And Contractors

Most employees (including eligible casuals) are entitled to SG. Some contractors are also entitled to SG if they’re paid wholly or principally for their labour. Don’t assume “contractor” means “no super” - assess each arrangement carefully and get advice if you’re unsure.

7) Modern Awards And Enterprise Agreements

Modern Awards set minimum pay and conditions for covered employees. While the payslip requirements themselves come from the Fair Work Regulations, Award coverage can impact classifications, loadings and what you treat as OTE in practice. If your workforce is covered, periodic award compliance checks are wise.

8) Budgeting And Payroll Set-Up

If you prefer cleaner budgeting, “base salary plus super” makes wage and super components clear in your accounts. If you use a “total package”, make sure your payroll system automatically carves out the correct super amount - and re-check those settings whenever SG rates change.

For wage benchmarking, the Fair Work Pay Calculator can help you estimate minimum entitlements before you finalize offers.

Common Mistakes To Avoid

• Not saying “plus” or “inclusive”: Ambiguity creates disputes. Spell it out clearly in offers, ads and contracts.
• Assuming a “package” always meets SG: You must still meet or exceed the SG minimum. If your package doesn’t leave enough for super, you could underpay.
• Late payments: Missing quarterly due dates can trigger the SGC, which adds interest and admin costs (and is not tax deductible).
• Ignoring SG rate changes: When the SG rate increases, review all “inclusive” packages and payroll settings to keep meeting the minimum.
• Mistreating bonuses and allowances: Some payments are OTE, others aren’t. Review your payroll categories and how you treat incentives against the rules and your workplace policies.
• Overlooking contractor SG: Contractors paid mainly for their labour may still be entitled to SG. Assess the arrangement, not just the label.

What To Include In Employment Contracts And Policies About Super

Your employment documents do the heavy lifting when it comes to clarity. Consider including:

• How the salary is expressed: State whether it’s base salary plus super, or a total package inclusive of super. Use examples if helpful.
• The applicable SG rate and process: Reference the current SG rate and that you’ll comply with future legislative increases.
• Payment timing and fund choice: Note quarterly payment timing, the employee’s right to choose a fund, and stapled fund procedures.
• How variable pay is treated: Clarify how you’ll treat bonuses, commissions and allowances for SG purposes, with a cross-reference to relevant policies.
• Record-keeping and payslips: Confirm that payslips will show required details under the Fair Work Regulations.

If you’re updating templates or scaling your team, a well-drafted Employment Contract supported by clear policies (for example, within a staff handbook) helps set expectations and reduces the risk of disputes. If you need tailored advice, our employment law team can help you get the language right.

Example Clauses You Can Adapt

• Plus super: “Your annual salary is $75,000 plus superannuation contributions payable in accordance with the Superannuation Guarantee (Administration) Act 1992 (Cth).”
• Inclusive package: “Your total fixed remuneration is $90,000 inclusive of mandatory superannuation contributions payable in accordance with the Superannuation Guarantee (Administration) Act 1992 (Cth).”

Tip: Avoid locking in a specific rate in the body of the clause. Refer to the Act instead so your contract stays accurate if the rate changes.

Accounting And Tax Considerations

Super interacts with payroll tax, fringe benefits and income tax settings. For budgeting, cash flow and reporting, it’s sensible to check your settings with your accountant. This guide focuses on the legal and employment aspects - for tax outcomes, seek independent accounting advice.

Key Takeaways

• Super is 11.5% from 1 July 2024 (increasing to 12% from 1 July 2025) and is generally calculated on ordinary time earnings.
• “Plus super” means super is paid on top of base salary; “inclusive” or “total package” means super is carved out of the total figure.
• Be explicit in offers and contracts about how salary is expressed, and review “inclusive” packages whenever the SG rate changes.
• Pay super by the quarterly deadlines to avoid the Superannuation Guarantee Charge, and keep payslips and records in line with the Fair Work Regulations.
• Check treatment of bonuses, allowances and contractors for SG purposes, and document your approach in contracts and policies.
• If you’re unsure about Award coverage, OTE categories or contract wording, getting advice early helps prevent underpayments and disputes.

If you’d like a consultation on setting up salary and superannuation arrangements or updating your employment contracts, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.