Super guarantee hits 12%: what employers must do for 2025-26

The compulsory super guarantee (SG) rate is 12% of an eligible worker's ordinary time earnings from 1 July 2025. This is up from 11.5% in 2024-25, and it is the final increase in the legislated schedule that began stepping the rate up in half-percentage-point increments. For the 2025-26 financial year and onward, 12% is the standard rate employers must contribute.

The rate is set under the Superannuation Guarantee (Administration) Act 1992 and administered by the Australian Taxation Office (ATO). The sections below explain who the obligation covers, what you calculate it on, when you must pay, and the practical steps to get 2025-26 right.

What changed: super guarantee is now 12%

From 1 July 2025 the SG rate is 12%, applied to ordinary time earnings (OTE). The key timing rule is that the rate is determined by when you pay salary and wages, not by the period the work was performed:

• Wages paid on or after 1 July 2025 attract 12%, even if some or all of the underlying pay period fell before that date.
• Wages paid before 1 July 2025 attract the previous 11.5% rate.

This matters most for the first pay run that straddles the financial-year change. If your payroll system was still configured to 11.5%, contributions for July-onward payments will be short.

There are no further scheduled increases after 12% under the current legislation. Future changes would require new legislation, so 12% can be treated as the stable rate for planning purposes (verify the current rate with the ATO each year).

Who the super guarantee applies to

The SG generally applies to employees, and in some cases to contractors who are paid wholly or principally for their labour, who are treated as employees for super purposes.

Key points:

• Both full-time and part-time employees are covered.
• Casual employees are covered.
• The longstanding $450-per-month earnings threshold was removed, so most employees are now eligible regardless of how much they earn in a month. Eligibility rules for employees under 18 still differ (broadly, hours-based conditions apply) — confirm the current criteria with the ATO.
• Some contractors are deemed employees for SG purposes where the contract is principally for their personal labour and skills.

Misclassifying a worker as a contractor does not remove an SG obligation if the substance of the arrangement is employment. Where worker status is unclear, document your reasoning and review the contract against the ATO's guidance.

What you calculate it on: ordinary time earnings

SG is calculated on ordinary time earnings (OTE), not total wages. OTE broadly covers what an employee earns for their ordinary hours of work.

OTE typically includes:

• Ordinary hours pay
• Over-award payments, certain allowances, and commissions
• Paid leave taken during ordinary hours (for example, annual leave)

OTE typically excludes:

• Overtime payments (where overtime hours are clearly identifiable)
• Some expense reimbursements

Because the line between OTE and non-OTE items (especially allowances and overtime) is a frequent source of underpayment, check each pay item against the ATO's OTE guidance rather than assuming. There is also a maximum contribution base — a quarterly cap on the earnings on which SG must be paid for high-income earners. The base is indexed and changes periodically, so confirm the current figure with the ATO before relying on it.

Payment timing and quarterly due dates

Under the current rules, SG contributions are paid quarterly and must reach the employee's fund by the 28th day after the end of each quarter:

Two critical points:

• The deadline is when the contribution is received by the fund, not when you process the payment. Clearing house and bank processing time must be built in.
• If a due date falls on a weekend or public holiday, you can pay on the next business day.

Missing a due date — even by a day, and even if you pay shortly after — generally means the contribution is late and you must lodge a superannuation guarantee charge (SGC) statement and pay the SGC to the ATO. The SGC is not tax-deductible and can include an interest component and an administration component, so late payment is materially more expensive than paying on time.

What employers must do for 2025-26

Practical compliance steps for the new rate:

• Confirm your payroll system applies 12% to all wages paid on or after 1 July 2025. Re-check any manually configured rates and any awards or enterprise agreements that reference a percentage.
• Review employment contracts, especially total remuneration ("package") arrangements. If super is included in a fixed package, the rate rise may reduce take-home pay unless renegotiated; if super is "plus super", your wage cost rises. Communicate the impact to affected staff.
• Budget for the increased cost across the year, including on-costs for leave and commissions that form part of OTE.
• Pay via SuperStream — contributions and the associated data must be sent electronically in the standard format. See the SuperStream data standard obligation for what compliant data and payment messaging requires.
• Diarise the quarterly due dates and allow lead time for clearing-house processing.
• Keep records of contributions, OTE calculations, and worker classifications.

You can pressure-test your processes with the payday super readiness tool, which is also relevant given the reform discussed below.

Common pitfalls and how to avoid them

• Using the pay-period date instead of the payment date to decide the rate — apply 12% based on when wages are *paid*.
• Calculating on gross wages instead of OTE — overtime and some items are excluded; misapplying this can over- or under-pay.
• Treating the processing date as the deadline — only the date the fund *receives* the money counts.
• Assuming late payments can be quietly topped up — once a due date is missed, the SGC regime applies and an SGC statement is required.
• Overlooking newly eligible workers — with the $450 threshold gone, low-hours and casual staff are generally in scope.
• Misclassifying contractors who are, in substance, employees for SG purposes.

For broader employer obligations connected to pay and entitlements, see the workplace topic.

What's coming next: payday super

The most significant upcoming change is payday super, a government reform under which employers would be required to pay SG contributions at the same time as salary and wages, rather than quarterly. The intent is to align super payments with each pay cycle so they reach funds faster and underpayment is easier to detect.

Payday super has been announced with a proposed commencement, but employers should treat the detailed rules and timing as subject to the legislative process — confirm the current status and start date with the ATO before changing systems. Preparing now is still worthwhile: more frequent payment cycles place a premium on accurate OTE calculation, clean fund data, and reliable clearing-house timing.

See the payday super obligation for what is proposed and how it would change payment timing, and use the payday super readiness tool to assess whether your payroll process could move from quarterly to per-pay-cycle contributions without breaching the receipt-by-fund deadlines.