Definition
Superannuation, or super, is Australia's compulsory retirement savings system. Employers must pay the super guarantee, currently 12% of an eligible employee's earnings, into the employee's super fund, and from 1 July 2026 these contributions must be paid with each payday under Payday Super.
How the super guarantee works
The super guarantee (SG) is the minimum an employer must contribute for each eligible worker. The rate rose to 12% on 1 July 2025, the final scheduled increase, and applies to salary and wages paid on or after that date. Until 30 June 2026 it was calculated on ordinary time earnings, which broadly means pay for ordinary hours including commissions, shift loadings and some allowances, but not overtime. Under Payday Super the rate stays at 12% and the calculation base becomes qualifying earnings.
Contributions go to the fund the employee chooses. If a new employee does not choose one, you generally need to request their stapled fund from the ATO, which is an existing account that follows them from job to job.
Super adds to the cost of every hire, so the shortlist matters. springhire scores every applicant against the same criteria with its candidate screening software, and a free plan is available.
Who you must pay super for
Super applies to eligible employees whether they are full-time, part-time or casual. The old $450 a month threshold was removed from 1 July 2022, so you now pay regardless of how much the employee earns. For workers under 18, you pay super only for weeks in which they work more than 30 hours. Contractors paid mainly for their labour count as employees for super purposes, even if they quote an ABN.
Payday Super from 1 July 2026
From 1 July 2026, employers pay super each payday instead of quarterly. Contributions must reach the employee's fund within 7 business days after payday, with enough information for the fund to allocate them. Longer periods apply in a few cases, such as a new employee's first contribution. If the money arrives late, the super guarantee charge applies, and a fund rejecting a payment does not extend the deadline.
As a worked example, an employee earns $2,000 in qualifying earnings for a fortnight. Super is $2,000 times 12%, which is $240, and it needs to reach their fund within 7 business days of that payday.
Common mistakes
Employers still working on quarterly habits are the most exposed. The ATO recommends paying on payday rather than close to the deadline, because processing delays and rejected payments eat into the 7 business days. Keep fund details current, check that your STP reports show the right qualifying earnings, and fix rejected contributions quickly, since the ATO's first-year approach looks at whether employers corrected problems promptly.
Official sources
- Australian Taxation Office: Super guarantee rates
- Australian Taxation Office: About Payday Super
- Australian Taxation Office: Work out if you have to pay super
Rules and rates change. Check the official source before you act on them.
Frequently asked questions
Superannuation is Australia's compulsory retirement savings system. Employers contribute a percentage of each eligible employee's earnings into a super fund, which is invested for the employee's retirement. The current super guarantee rate is 12%, and from 1 July 2026 employers must pay it with each payday.
The super guarantee rate is 12%. It reached that level on 1 July 2025, which the ATO describes as the final scheduled increase. From 1 July 2026 the rate stays at 12%, but it is calculated on qualifying earnings and must be paid with each payday.
Yes. Super applies to eligible employees whether they are full-time, part-time or casual, and since 1 July 2022 there has been no minimum monthly earnings threshold. For employees under 18, super is only payable for weeks in which they work more than 30 hours.
Related terms
Part of the springhire HR glossary.
