Have you ever looked closely at your payslip and wondered what the extra line labelled 'superannuation' means? Or maybe you've seen the letters 'SGC' next to it but have no idea what they stand for. If so, you're not alone.
Super can be confusing, especially if you're new to working or don't know much about saving money for when you're older. This article will help you understand the superannuation guarantee and what you may be entitled to.
What is the super guarantee (SG)?
Superannuation guarantee contributions (SGC) are mandatory payments made by your employer to your super fund if you’re eligible.
When you start working as an employee, your employer is legally required to make regular payments into your super fund. This is to help you save money for your retirement so that you can have enough money to live on when you stop working.
Under Payday Super, super guarantee amounts must be paid by your employer at the same time as your salary or wages. With your super paid more frequently than each quarter, as it has been previously, your balance might improve with more time in the market. In other words, as money comes in more regularly, your growing balance can benefit from compound interest.
No matter where you are in your career, the super guarantee plays an important role in helping you save for retirement. It could make a big difference when the time comes for you to stop working.
What is the super guarantee rate?
The SG rate is the minimum percentage of your earnings that your employer must pay to your super fund on your behalf.
In other words, if you’re eligible for the super guarantee, the minimum super contribution your employer must pay you is currently 12% of your pay.
How is the super guarantee rate calculated?
The super guarantee contribution is calculated as a percentage of your pay or, specifically, your qualifying earnings. Super is worked out on QE, which usually includes your normal hours of work, annual leave, sick leave, and some allowances such as commissions and eligible salary sacrifice amounts.
For more information on qualifying earnings go to the ATO website.
Does my employer have to pay the super guarantee?
While most employers need to make a SG contribution, there are some exceptions. Read on to find out what they are.
For a quick guide on eligibility for the main work types, check out the table below.
If you're under 18 and working, you might not think that superannuation is something you need to worry about just yet. However, getting a head start on your super while you're young could make a big difference to your retirement savings down the track.
That’s why it’s so important to understand your rights and super entitlements, which are a bit different for you if you’re under 18.
If you’re under 18 years old and work more than 30 hours a week, your employer must pay super contributions for you (unless you fall into the circumstances mentioned above).
If you’re under 18 years old and work less than 30 hours a week, your employer does not have to pay super contributions for you (but they may choose to).
If you have multiple jobs, the number of hours worked for different jobs should be calculated separately.
For example, let’s say you worked 12 hours a week as a tutor and 32 hours a week as a waiter.
You wouldn’t be entitled to super in your job as a tutor but would be entitled to receive super for your work as a waiter.
WATCH: Learn the basics of super and what it means for retirement with this Super Simple Chat
What is the maximum super contribution base?
The maximum super contribution base is the highest amount of money you can earn before your employer can stop making SG contributions. It means that your employer only needs to contribute the SGC rate – currently 12% of your earnings – up to this limit to your super fund.
This limit changes every year and prior to Payday Super arriving on 1 July 2026, it was calculated per quarter. Now the maximum super contribution base (MSCB) is calculated annually
