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.
Contents
When you’re hiring in a small business or startup, the words you use around pay can make a big difference.
One of the most common (and most misunderstood) phrases is a salary package including super. You’ll see it in job ads, offer letters, and employment contracts. You’ll also hear it in negotiations when a candidate asks for “$120k package” or “$80k inc super”.
Used properly, a salary package including super can be a clear and efficient way to communicate total remuneration. Used poorly, it can create confusion, disputes, and payroll mistakes (particularly where a candidate thinks they’re agreeing to one number “take home”, and you think you’re agreeing to a different number “total cost to company”).
This guide walks you through what a salary package including super generally means in Australia, how to structure it in your documents, and the practical traps to avoid as an employer.
What Does “Salary Package Including Super” Mean In Australia?
In Australia, a salary package including super generally means the stated figure is the total remuneration made up of:
- Base salary (ordinary time earnings) paid to the employee as wages; plus
- Superannuation contributions you pay as required by law (generally at the Superannuation Guarantee rate, subject to eligibility, earnings-base rules and caps).
So if your offer says “$110,000 package including super”, the intention is usually:
- Base salary = $110,000 minus super; and
- Super = calculated at the applicable SG rate and paid into the employee’s nominated fund.
This is different from a salary described as “$110,000 plus super”, where $110,000 is the base salary and super is paid on top.
A Simple Example: “Inc Super” Vs “Plus Super”
Let’s say you and the employee are talking about $110,000.
- $110,000 package including super means the total cost is $110,000, and the base salary is lower because super comes out of that amount.
- $110,000 plus super means the base salary is $110,000, and your total cost is higher because super is additional.
For growing businesses watching cash flow, this distinction matters. For employees comparing offers, it matters too. Your job is to make sure the wording in your documents matches what you actually intend to pay.
Why Employers Use Salary Packages Including Super (And When It Makes Sense)
There are plenty of legitimate reasons to offer a salary package including super, especially in early-stage startups and small businesses.
Common reasons include:
- Budget certainty: it gives you a clear “total cost” number for each role.
- Consistent negotiations: candidates often talk in “package” terms, especially for professional roles.
- Scaling headcount: it helps you compare different hires and manage runway more predictably.
- Remuneration frameworks: some businesses standardise offers as total remuneration for internal parity.
That said, the big risk is that a package figure can feel like a “salary” to the candidate. If you’re not crystal clear, you can end up with a mismatch in expectations from day one.
In a startup environment, where trust and retention are everything, clarity around remuneration is worth the extra care.
How To Calculate A Salary Package Including Super (Without Payroll Headaches)
From a practical standpoint, you’ll usually start with one number (the “package”) and need to calculate the base salary and the super amount.
The core idea is:
- Total package = base salary + super (at the SG rate, to the extent the base salary/earnings are SG-applicable under the rules).
If your package amount is fixed, and super is a percentage of base salary, then base salary is calculated by dividing the package by (1 + SG rate).
Step-By-Step Method (Conceptually)
- Confirm the SG rate you’ll apply (and whether any cap or special earnings rules apply).
- Confirm what portion is “salary” (paid to the employee as wages).
- Confirm super treatment (paid in addition to wages, but within the package cap).
- Document the formula in your employment contract or offer letter so there’s no ambiguity.
Because SG rates and payroll rules can change over time, many employers avoid hardcoding exact figures and instead describe super as being paid at the “statutory rate” (or “Superannuation Guarantee rate”) and make clear that the package is inclusive of that amount.
Don’t Forget: What You Put In Writing Matters Most
Even if you explain the numbers verbally, the written offer and contract are what people rely on later. A well-drafted Employment Contract helps you set the expectation properly and reduces the chance of disputes about whether super is included or not.
Common Traps For Employers (And How To Avoid Them)
When you use a salary package including super, the problems tend to be predictable. The good news is they’re also avoidable if you know what to look for.
1. The Contract Says One Thing, The Job Ad Says Another
This is more common than it should be: the job ad says “$90k + super” but the offer says “$90k package including super”.
Even if the employee signs, you’ve created a credibility issue and a potential dispute. Make sure your job ad, offer letter, and contract use consistent language.
2. Not Defining What “Total Remuneration” Includes
“Package” sometimes gets used as a catch-all for other benefits (bonuses, allowances, commissions, or even equity).
If you’re using the phrase “salary package including super” and you also offer other benefits, spell out what is and isn’t included. Otherwise you risk an employee arguing later that a bonus was “part of the package” and should have been paid regardless of performance.
3. Award Or Agreement Compliance Gets Missed
If the role is covered by a Modern Award or enterprise agreement, you still need to ensure the employee receives at least their minimum entitlements (including minimum base rates, penalty rates, overtime, and allowances where applicable).
A “total package” figure doesn’t automatically make you compliant. If you want to use an annualised arrangement, set-off clauses, or similar approaches, you need to do it carefully.
This is one reason many employers run an Award compliance check when hiring or when changing remuneration structures.
4. Salary Changes But “Package” Language Doesn’t Get Updated
Pay rises are another danger zone. If your contract states a fixed package amount inclusive of super and you increase salary informally, your payroll and documentation can drift out of alignment.
Keep changes in writing (even if it’s a short contract variation letter) and make sure the “inclusive of super” position remains clear after the increase.
5. Confusion During Termination And Final Pay
When employment ends, questions come up quickly: what is the employee’s base rate? what is notice pay? what about unused annual leave?
Many termination-related calculations depend on the employee’s base rate of pay/ordinary pay (and sometimes award or contract definitions), rather than the headline “package” amount. If you don’t clearly document the base salary component, final pay calculations can become messy.
It’s also worth understanding how payment in lieu of notice works, because notice and termination payments often cause the most friction if expectations weren’t set properly from the start.
How To Draft Offers And Contracts When The Salary Package Includes Super
If you want to pay a salary package including super, your employment paperwork should remove ambiguity.
As a practical approach, your documents should:
- state the total remuneration amount (the package);
- state that the package is inclusive of superannuation contributions;
- confirm that super will be paid at the statutory rate (or Superannuation Guarantee rate) into the employee’s nominated super fund; and
- make clear that the cash salary component is the remainder after super is calculated (and that the cash component may change if the SG rate changes).
Be Clear About Timing And Payroll Administration
Many disputes aren’t about whether super is included, but about when it’s paid and whether it matches the agreed structure.
Make sure you’re consistent about:
- pay frequency (weekly/fortnightly/monthly);
- super payment cycles and reporting; and
- whether the employee can salary sacrifice and how that interacts with the package (and any tax implications).
What About Startups Offering Equity Too?
If your startup offers equity (such as options) alongside a salary package, it’s even more important to separate the concepts.
Equity is typically not “salary” and shouldn’t be bundled into the “salary package including super” figure unless your documents clearly explain what’s included and how it is valued.
If you have co-founders or multiple shareholders, it can also be helpful to document expectations in a Shareholders Agreement, particularly where remuneration is linked to roles, vesting, or performance milestones.
Don’t Forget Your Wider Employment Document Set
Even when you nail the remuneration clause, it’s still important that the rest of your employment documentation supports your business properly (confidentiality, IP ownership, termination, policies, and so on).
If you’re hiring your first employees, a solid contract is the start - but it shouldn’t be the only piece of your legal foundation.
Related Compliance Considerations For Small Businesses
A salary package including super is primarily an employment and payroll issue, but it often intersects with broader compliance topics that small businesses and startups deal with as they grow.
Consumer-Facing Businesses And Pay Representations
If you publish remuneration in a way that could mislead (for example, advertising a role at “$X salary” when it’s actually “$X package including super”), you can damage trust and potentially create legal risk.
This kind of clarity is part of a broader habit of avoiding misleading statements in your business. If you’re customer-facing, you’ll already be thinking about rules under Australian Consumer Law - including how you describe prices, inclusions, and offers. The same mindset applies in recruitment.
Privacy And Employee Data
Hiring also means collecting personal information: resumes, references, banking details, tax file number declarations, and sometimes health information.
If you’re collecting and storing personal information, having a fit-for-purpose Privacy Policy (and internal handling procedures) can help you show you’re taking privacy seriously as you scale.
Getting The “Legal Basics” Right Early
Many startups focus on hiring quickly and worry about “paperwork later”. The issue is that employment disputes, underpayment issues, and misunderstandings about remuneration often show up early - sometimes within the first 3 to 6 months.
Setting the right foundations early (including clear salary package wording) is usually faster and cheaper than fixing misunderstandings later.
Key Takeaways
- A salary package including super generally means the stated figure is total remuneration, with super paid out of (not on top of) that amount.
- Using “inc super” can help with budgeting and consistency, but only if you document it clearly and use consistent wording across your job ads, offers, and contracts.
- To avoid disputes, your contract should clearly state the package amount, confirm it is inclusive of super, and explain how the base salary component is calculated (including what happens if the SG rate changes).
- Be careful with Award compliance, annualised salary arrangements, and termination/final pay calculations - the “package” headline number isn’t always the number used for legal calculations, and award/contract definitions can matter.
- Strong documentation (including a properly drafted Employment Contract and supporting policies) is one of the simplest ways to reduce risk as your team grows.
Important: This article provides general information only and is not legal, tax or accounting advice. Superannuation rules (including SG eligibility, earnings bases such as ordinary time earnings, caps, and salary sacrifice arrangements) can be complex and change over time. Consider speaking with your accountant or payroll provider for calculations, and get legal advice for contract wording and Award compliance.
If you’d like help drafting an employment contract or setting up a salary package including super the right way for your business, contact Sprintlaw on 1800 730 617 or email team@sprintlaw.com.au for a free, no-obligations chat.
