The Superannuation Guarantee (SG) is the compulsory contribution your employer must pay into your super fund on top of your wages. It is the foundation of Australia’s retirement system and, for most employees, the single largest source of their super. Two big changes have now landed: the SG rate has reached its final legislated level of 12%, and from 1 July 2026 employers must pay super on every payday rather than quarterly.
This guide explains the current SG rate, who is entitled to it, how it is calculated, and how the new Payday Super regime works. If you want the wider picture of how these contributions fit into your retirement savings, start with our guide to how superannuation works in Australia.
The SG Rate Is Now 12%
The Super Guarantee rate reached 12% on 1 July 2025, up from 11.5%. This was the final increase in a long-legislated schedule that stepped the rate up gradually over several years. There are no further increases scheduled — 12% is the settled rate.
For an employee, this simply means your employer contributes an amount equal to 12% of your ordinary time earnings into super. On a $70,000 salary, that is $8,400 a year going into your retirement savings before you lift a finger. Those contributions count towards your concessional contribution cap, which is worth remembering if you also salary sacrifice.
Who Is Entitled to the SG?
Most employees are entitled to SG, including part-time and casual workers. In recent years the old $450-per-month minimum earnings threshold was removed, so even low earners now generally receive SG on their wages. Contractors who are paid mainly for their labour can also be entitled to SG, even if they have an ABN.
SG is calculated on your ordinary time earnings (OTE) — broadly, what you earn for your ordinary hours of work, including many allowances and commissions, but generally excluding overtime. There is a maximum contribution base each quarter, indexed annually, above which employers are not required to pay SG; check the current figure at ato.gov.au.
Payday Super: The 1 July 2026 Change
The most significant recent reform is Payday Super, which takes effect from 1 July 2026. Until now, employers only had to pay SG quarterly, meaning contributions could sit unpaid for up to a few months after the wages that generated them. Under Payday Super, employers must pay SG contributions at the same time as they pay salary and wages.
Why It Matters
- For employees: Your super is invested sooner, so it starts earning returns earlier. It is also far easier to spot if an employer misses a payment, because the contribution should appear alongside each pay rather than months later. Compounding on contributions paid weekly or fortnightly, over a whole career, adds up.
- For employers: Payroll and super processes must be aligned so contributions leave with each pay run. This means reviewing payroll software, cash-flow timing, and clearing-house arrangements well before the start date. Late contributions attract the Super Guarantee Charge, which is not tax-deductible and includes interest and administrative components.
How the SG Is Calculated: A Quick Example
Suppose an employee earns $6,000 in ordinary time earnings for a monthly pay period. Their SG entitlement is 12% of $6,000, or $720. Under Payday Super, that $720 must be paid into their fund at the same time as the $6,000 in wages, rather than being batched up and paid after the end of the quarter.
What Employees Should Do
- Check your payslips and fund. Confirm SG is being paid and going to the right fund. Under Payday Super it should line up with each pay.
- Consolidate accounts. If you have several super accounts from past jobs, combining them saves on duplicate fees and insurance premiums.
- Consider topping up. SG is a floor, not a ceiling. Voluntary contributions via salary sacrifice or the government co-contribution can lift your final balance substantially.
What Employers Should Do
- Review payroll systems ahead of 1 July 2026 to ensure super can be paid per pay cycle.
- Check cash flow. Paying super each payday changes the timing of outgoings compared with quarterly payments.
- Keep clean records of OTE and contributions, and act quickly on any missed payments to avoid the Super Guarantee Charge.
How the SG Fits the Bigger Retirement Picture
At 12%, the Super Guarantee is more generous than it has ever been, but it is calibrated to provide a base level of retirement income when combined with the Age Pension — not a comfortable retirement on its own for most people. Over a full working life, 12% of ordinary earnings, invested and compounded, builds a substantial balance, especially for those who start young and stay in the workforce continuously.
The people most at risk of falling short are those with interrupted careers, long periods of part-time work, or extended time out of the workforce — often for caring responsibilities. For them, the SG alone may leave a gap that voluntary contributions, the government co-contribution, or spouse contribution splitting can help close. This is why treating the SG as a floor rather than a target is such an important mindset.
Checking Your SG Is Being Paid
Under Payday Super it is easier than ever to keep employers honest. A few simple habits help:
- Match payslips to your fund. Log into your super account periodically and confirm the contributions line up with what your payslips say.
- Watch for gaps around job changes. Contributions can occasionally be missed when you move employers or your fund details change.
- Report suspected non-payment. If super is missing, raise it with your employer first, then the ATO, which has tools to chase unpaid SG.
Common Pitfalls
- Assuming overtime attracts SG. Overtime is generally excluded from ordinary time earnings, though the rules can be nuanced — check specific allowances at ato.gov.au.
- Missing contractors. Some contractors are entitled to SG; misclassifying them can create a liability.
- Late payment under the old mindset. With Payday Super, “we’ll sort it out next quarter” is no longer an option.
The Bigger Picture
The SG at 12%, paid promptly under Payday Super, gives Australian workers a stronger, steadier foundation for retirement than ever before. But it is still just a base. How far it takes you depends on fees, returns, and any extra you contribute — which is why it is worth reading about how much super you need to retire and choosing a well-performing fund.
This article is general information only and not financial or tax advice; consider your own circumstances and speak to a licensed adviser or the ATO before acting.