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.
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 SGC rate is the minimum percentage of your ordinary time earnings that your employer must pay to your super fund on your behalf. For 2024-25, the SGC rate is 11.5%, but this will gradually increase to 12% by 1 July 2025.
In other words, if you’re eligible for the super guarantee, the minimum super contribution your employer must pay you is currently 11.5% 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 ordinary time earnings. This is the amount you earn for your ordinary hours of work.
Ordinary time earnings typically include your base salary, as well as any bonuses, commissions, and shift allowances you receive. However, there are generally some exclusions like overtime pay, expense allowances and reimbursements of expenses.
Am I eligible for the super guarantee?
While most employees are generally eligible for the super guarantee, 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.
Full-time
|
Yes
|
| Part-time or casual |
Yes |
| Self-employed |
No, but can choose to make your own contributions
|
| Contractor |
Depends on work arrangement
|
Who isn’t covered by the super guarantee?
You may not be eligible for SG contributions if you’re:
- an Australian resident working for and being paid by an employer overseas for work done outside of Australia
- temporarily working in Australia on behalf of an overseas employer and are covered by a bilateral super agreement
- a non-resident employee working outside Australia
- a foreign executive who holds certain visas or entry permits
- a paid private or domestic worker (e.g. nannies or housekeepers) who works for 30 hours or less per week
- paid under the Community Development Employment Program
- under 18 years old and work less than 30 hours a week in that job (see below).
Super guarantee for under 18s
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.
What is the maximum super contribution base?
The maximum super contribution base is the highest amount of money you can earn in a quarter (or 3 months) before your employer can stop making SG contributions in that quarter. It means that your employer only needs to contribute the SGC rate – currently 11.5% of your earnings – up to this limit to your super fund.
This limit changes every year – for 2024-25, it's set at $65,070 per quarter. If you earn more than this amount in a quarter, your employer doesn't have to pay SG contributions for the part of your earnings over the limit.
Quarterly super cap
The maximum super contribution base effectively means there’s a cap on how much super guarantee contributions your employer must pay quarter (though they may choose to pay more).
For example, for the 2024-25 financial year, the most your employer is required to contribute to your super fund is 11.5% of $65,070 each quarter, which is about $7483.05.
| 2024-25 |
$65,070 |
2023-24
|
$62,270
|
| 2022-23 |
$60,220 |
| 2021-22 |
$58,920 |
| 2020-21 |
$57,090 |
| 2019-20 |
$55,270 |
| 2018-19 |
$54,030 |
