Salary Including Super: How To Make Compliant Offers In Australia

When you’re hiring, it’s tempting to focus on the headline number and move quickly. But in Australia, one small wording choice in an offer can create big (and expensive) misunderstandings later: is the figure a salary including super, or is it a salary excluding super (with super on top)?

For many small businesses, this comes up at the exact moment you want things to feel smooth - you’ve found the right person, you’re ready to make an offer, and you don’t want to lose them over details. The problem is, “details” like superannuation are often where disputes, payroll errors and Fair Work issues begin.

Below, we’ll walk you through how salary including super works, what to watch for when drafting offers, and how to keep your employment documentation clear and compliant from day one.

What Does “Salary Including Super” Actually Mean?

In plain terms, a salary including super means the number you’re quoting is the total remuneration package - the employee’s base pay plus the superannuation you pay on their behalf.

This is different from quoting a base salary and then paying super on top.

Salary Including Super vs Salary Excluding Super

• Salary excluding superannuation (super on top): You quote a base salary (what the employee receives as wages), and you pay superannuation contributions in addition to that.
• Salary including super (total package): You quote a single “package” amount. The base salary is calculated by backing out the super component from that package amount.

Many businesses use “package” offers for simplicity, especially for salaried roles. But it only works if you document it properly and ensure the employee still receives at least their minimum entitlements (including award minimums, if an award applies).

If you’d like a deeper explanation of the terminology employers use, it can also help to clarify the difference between salary vs wages so your offer wording matches your payroll setup.

Why “Salary Including Super” Matters When You’re Making Offers

It matters because the same number can lead to two completely different outcomes.

Let’s say you tell a candidate: “We’re offering $100,000 per year.”

• If that’s salary excluding super, the employee expects to be paid $100,000 (before tax), and you pay super on top.
• If that’s salary including super, the employee’s base salary is less than $100,000, because part of the $100,000 is allocated to super.

If you don’t clearly state which one you mean, you can end up with:

• employees feeling misled (and losing trust immediately)
• payroll corrections and backpay
• complaints, disputes, or even underpayment allegations
• confusion when the employee compares your offer to other offers

Just as importantly, you want your written documents to match what you actually do in payroll. Your Employment Contract should line up with how you calculate wages and super contributions in practice.

How To Calculate A Salary Package Including Super (With A Simple Example)

If you offer a salary including super, you’ll typically need to work out the base salary by backing out the super component from the package.

Important: this calculation is often shown as a simple “package ÷ (1 + SG rate)” formula, but real payroll can be more nuanced. Superannuation Guarantee (SG) is generally calculated on an employee’s ordinary time earnings (OTE), which may not always match their total earnings. There can also be limits such as the maximum super contribution base (which caps the earnings level on which SG is required). Super rates also change over time, so always confirm the current SG rate before finalising figures and make sure your payroll system is applying the correct rules for the employee’s circumstances.

Example: $100,000 Salary Including Super

Assume the total package is $100,000 (including super). If the SG rate is 11.5%, then (as a simplified illustration):

• Base salary (excluding super) = $100,000 ÷ 1.115 = $89,686.10 (approx.)
• Super component = $100,000 − $89,686.10 = $10,313.90 (approx.)

So even though the “package” is $100,000, the employee’s base salary (their wages before tax) is around $89,686.10.

Note: the above is a general example only. Depending on how the role is structured (and what counts as OTE), the actual super amount and split may differ. For tax treatment and payroll setup, you should also check the ATO guidance or speak with your accountant/bookkeeper.

Why This Calculation Impacts Your Compliance Checks

When you’re checking whether the role meets minimum requirements (for example, award minimum rates), you generally need to compare the base salary excluding superannuation to the relevant minimums - not the package figure.

This is one reason employers get caught out: the package sounds generous, but the base can fall below what’s required once super is backed out.

If you’re ever unsure whether your remuneration model is set up correctly, it’s usually worth speaking with an employment lawyer early - it’s much easier to fix offer documents before the employee starts than after a dispute arises.

How To Write A Clear Offer: The Wording You Need (And Common Pitfalls)

The safest approach is to assume the candidate will read your offer literally. If you want the amount to be a salary including super, say exactly that - and also spell out the base and the super component.

Best Practice: State Both The Base Salary And The Package

Even if you negotiate based on a “package”, you’ll reduce confusion by including both figures in writing.

For example, your offer could say (in plain English):

• The employee’s base salary excluding super is $X per annum (before tax)
• Superannuation will be paid at the statutory rate on top of the base salary

Or, if you truly want a package model:

• The employee’s total remuneration package (including super) is $Y per annum
• This is inclusive of superannuation contributions required by law
• The base salary will be $X per annum, with superannuation making up the balance (and this split may change if the SG rate changes)

Pitfall 1: Writing “$X + super” But Running Payroll As “Package Inclusive Of Super”

This is one of the fastest ways to damage trust. If your email or offer letter says “$90,000 + super”, but you process it as a $90,000 package, the employee will see a lower base salary than they expected.

If you’ve already made an offer and realise you used unclear wording, it’s best to clarify immediately in writing and update your contract documents before the employee starts.

Pitfall 2: Not Addressing What Happens When The Super Rate Changes

Super rates increase over time. If you offer a salary including super, you should think through (and document) what happens when the SG rate changes.

In many package arrangements, the total package stays the same and the base reduces slightly as the SG rate increases. That can be lawful, but only if it’s clearly agreed and still meets minimum entitlements.

If you don’t address it at all, you can end up with awkward conversations (or disputes) every time the SG rate increases.

Pitfall 3: Assuming “Total Package” Automatically Covers All Entitlements

“Salary including super” is only one piece of the puzzle. Depending on the role, you also need to consider award entitlements and other payments that might apply (like allowances, overtime, penalty rates, or leave loading).

For example, if you employ someone covered by an award, their minimum entitlements can include how certain leave payments must be calculated and paid. Getting across things like annual leave payments can help you sense-check that your salary arrangements aren’t accidentally creating underpayments.

What Else Should Employers Check Before Making A “Salary Including Super” Offer?

Before you send an offer, it helps to do a quick compliance checklist. This saves you from having to renegotiate later (or worse, correcting payroll after they’ve started).

1) Is The Employee Covered By a Modern Award or Enterprise Agreement?

Many employees are covered by a modern award, even if they’re paid a salary. If an award applies, you’ll need to ensure your base salary (excluding super) satisfies the minimum wages and any other applicable conditions.

If you’re using an “all-in” salary to absorb certain entitlements (like overtime), you need to be careful. It’s not enough to simply pay a higher salary and hope it balances out - it must actually do so in practice, and your contract wording needs to support it.

2) Does The Offer Clearly State Full-Time/Part-Time/Casual Status?

Super and salary expectations can vary depending on the engagement type. The offer should clearly state:

• employment status (full-time, part-time, casual)
• ordinary hours of work
• how remuneration is calculated and paid

Clarity here also supports compliance in related areas, like termination entitlements. For example, if you ever need to end employment, you’ll want your contract and payroll setup to align with rules around notice and payment in lieu of notice.

3) Are You Using The Right Document: Offer Letter vs Employment Contract?

Many employers send a short email offer, then “get the paperwork sorted later.” That can work - but only if the email doesn’t accidentally create contractual promises you don’t intend to make.

Ideally, your written offer and your Employment Contract should be consistent and should cover (at minimum):

• the remuneration structure (including whether it’s salary including super or excluding super)
• when and how salary is paid
• superannuation arrangements
• hours, location (if relevant), and reporting lines
• confidentiality and IP (if relevant to the role)
• termination provisions (notice, payment in lieu, final pay)

4) Do You Have Payroll and Super Processes Set Up To Match The Offer?

This is practical, but crucial. If the offer says salary excluding super, your payroll system needs to calculate super on top of ordinary time earnings. If the offer says salary including super, your payroll needs to ensure the “package” is being split correctly between base salary and super - and that the base still meets minimum obligations.

It’s also worth checking that your payslips, employment records, and super payment cycle are consistent and up to date. Small admin errors repeated over time can create large liabilities.

Key Takeaways

• A salary including super means the quoted figure is a total package, and the employee’s base salary is lower because super is included in that number.
• To avoid misunderstandings, clearly state whether the offer is salary excluding super (super on top) or a salary including super package - and ideally include both the base and the package figures in writing.
• When checking minimum entitlements (like award minimum wages), you generally need to compare the base salary excluding superannuation to the minimums, not the package figure.
• If you’re offering a package, consider what happens when the Superannuation Guarantee rate changes, and ensure your documents address this clearly.
• Offer letters, employment contracts, payroll settings and payslips should all align - inconsistency is where disputes and underpayment risks often start.

If you’d like help drafting or reviewing an offer or employment contract (including the right wording for salary including super), you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.