How to Calculate Superannuation for Employees in Australia 2025–26

Quick Answer

In 2025–26, you must pay 11.5% of each eligible employee's ordinary time earnings into super. From 1 July 2026, the rate rises to 12% and super must be paid on every payday — not quarterly. There is no minimum earnings threshold for most employees under 18 who work over 30 hours per week.

The Super Guarantee Rate in 2025–26: 11.5%

The Super Guarantee rate for the 2025–26 financial year is 11.5% — and it applies to ordinary time earnings (OTE), not total earnings. This rate is legislated under the Superannuation Guarantee (Administration) Act 1992, which sets the SG rate on a scheduled path toward 12%. The 11.5% rate has applied since 1 July 2024 and remains in force until 30 June 2026.

On 1 July 2026 — in 10 days — the rate rises permanently to 12%. This is the final step in the legislated schedule that has been increasing the SG rate by 0.5 percentage points per year since 2021. If you use a flat percentage in your payroll system and haven't updated it yet, do it today. Paying 11.5% on a payday that falls on or after 1 July 2026 is an underpayment — and under Payday Super, the SGC starts accruing almost immediately.

For practical calculation: if an employee earns $2,000 in ordinary time earnings in a pay period, their super entitlement is $2,000 × 11.5% = $230 until 30 June 2026, then $2,000 × 12% = $240 from 1 July 2026 onward.

What Counts as Ordinary Time Earnings (OTE)?

Ordinary time earnings (OTE) is the base on which you calculate super — and it is not the same as gross wages. The ATO defines OTE as earnings for the employee's ordinary hours of work, including over-award payments, shift loadings, and allowances related to ordinary hours. It does not include overtime payments, expense reimbursements, or salary-sacrificed amounts below the concessional cap.

The most common mistake small business owners make is calculating super on total gross pay, including overtime. Under the ATO's definition, if an employee works 38 ordinary hours plus 5 hours overtime in a week, super is only owed on the pay attributable to the 38 ordinary hours. However, if your employment contract or Award treats overtime as part of ordinary hours — which some Awards do — then it is included in OTE.

Some specific inclusions and exclusions are worth knowing. Bonuses are included if they relate to ordinary hours worked. Parental leave paid by the employer is included in OTE. On-call allowances are generally included. Redundancy payments, termination payments, and reimbursements are excluded. When in doubt, the ATO's OTE Fact Sheet (NAT 75389) is the authoritative reference.

Who Is Eligible for Super? Employee Eligibility Rules

Most employees are eligible for super, but eligibility is defined by the Superannuation Guarantee (Administration) Act 1992, not by whether someone is full-time, part-time, or casual. The key eligibility trigger is being an employee — the legal definition, not a commercial label. Under the ATO's rules, you owe super to any employee aged 18 or over regardless of how much they earn. There is no minimum earnings threshold for adults since 1 July 2022.

Employees under 18 are eligible only if they work more than 30 hours in a week. If an under-18 employee works 25 hours in a week, no super is owed for that week. If they work 32 hours, super applies to all of their OTE for that week — not just the hours above 30.

Contractors can also be deemed employees for super purposes. Under the Superannuation Guarantee (Administration) Act, if a contractor is engaged wholly or principally for their labour, you must pay them super regardless of the ABN they hold. The High Court's 2022 decisions in CFMMEU v Personnel Contracting and ZG Operations v Jamsek clarified the legal test for employment status. If you're paying someone on an ABN for regular, ongoing work they perform personally, seek advice before treating them as a contractor for super purposes.

Step-by-Step: How to Calculate Super for Each Pay Period

The calculation itself is straightforward once you've identified OTE correctly. For each pay period, multiply the employee's OTE by the applicable SG rate. Until 30 June 2026, that's 11.5%. From 1 July 2026, it's 12%. The result is the minimum super contribution you must make to their nominated fund.

Here is a worked example for a fortnightly pay period in 2025–26. An employee earns $3,200 in base salary and works 4 hours of overtime paid at $80/hour ($320 overtime total). Their OTE is $3,200 (base only — overtime excluded). Super = $3,200 × 11.5% = $368. If that same employee also received a $500 performance bonus related to their ordinary duties, OTE becomes $3,700 and super = $3,700 × 11.5% = $425.50.

For salaried employees where the contract is expressed as a total package including super, the calculation works differently. A $100,000 package inclusive of super means the employer contributes $100,000 ÷ 1.115 = $89,686.10 as salary and $10,313.90 as super (11.5% of the salary component). A $100,000 package exclusive of super means super is $100,000 × 11.5% = $11,500 on top. Make sure your employment contracts are explicit about which structure applies — ambiguity here causes significant underpayment disputes.

Payment Deadlines: Quarterly Now, Payday Super from 1 July 2026

Under the current rules (until 30 June 2026), super must be paid quarterly. The four quarterly deadlines are: 28 October (for July–September), 28 January (for October–December), 28 April (for January–March), and 28 July (for April–June). Missing a quarterly deadline means you owe the Superannuation Guarantee Charge (SGC), which is calculated on total salary and wages — a broader base than OTE — plus a $20 per employee administration fee and interest at 10% per annum.

From 1 July 2026 — just 10 days away — Payday Super takes effect. Under this reform, legislated through the Treasury Laws Amendment (Payday Super) Act, employers must pay super on the same day they pay wages. The SGC will accrue from the day after the payday if super is not paid on time. This is a fundamental change: instead of four deadlines a year, there will be a deadline every single pay run. A business running weekly payroll will have 52 super deadlines per year instead of 4.

The practical consequence for cash flow is significant. Quarterly super gave employers up to 90 days of float on super liabilities. Payday Super eliminates that float entirely. If you haven't adjusted your business bank account buffer or your payroll funding process, do it before 1 July 2026. Many accountants are advising clients to keep a dedicated super clearing account pre-funded to handle the daily settlement cycle.

Salary Sacrifice, Employer Contributions, and the Concessional Cap

If an employee salary-sacrifices additional super, those contributions count toward the concessional contributions cap — $30,000 per person in 2025–26 — but they do not reduce your SG obligation. You must still pay the full 11.5% SG on the employee's OTE regardless of how much the employee salary-sacrifices on top. An employer can choose to apply salary-sacrificed contributions toward the SG amount only if the employment contract explicitly provides for this, and even then it is complex — get advice before doing it.

The concessional cap of $30,000 in 2025–26 covers employer SG contributions plus any salary-sacrificed amounts. If an employee earns $200,000 and receives $23,000 in SG contributions (11.5%), they have $7,000 of cap space remaining for salary sacrifice. If they salary-sacrifice $10,000, the amount over the cap ($3,000) is treated as assessable income and taxed at marginal rates, with a 15% offset. This is the employee's tax problem, not the employer's, but employees often ask their employer to help them model it.

For employers who want to contribute more than the SG minimum, additional contributions are employer non-concessional or concessional depending on the structure. There is no employer penalty for over-contributing — the cap restriction applies at the individual employee level. SAB Account AI lets you set a fixed dollar top-up per employee above the SG minimum without affecting the compliance calculation for the SG obligation itself.

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What is the super rate for employees in 2025–26?

The Super Guarantee rate is 11.5% for the 2025–26 financial year (1 July 2025 to 30 June 2026). It rises to 12% permanently from 1 July 2026.

How do I calculate super on an employee's wages?

Multiply the employee's ordinary time earnings (OTE) by 11.5% (or 12% from 1 July 2026). OTE excludes overtime pay but includes base salary, shift loadings, and most allowances.

Is there a minimum earning threshold for super in 2025–26?

No. The ATO abolished the $450 per month minimum earnings threshold on 1 July 2022. All adult employees now earn super regardless of how much they are paid. Employees under 18 must work more than 30 hours per week to be eligible.

Does super apply to casual employees in Australia?

Yes. Casual employees are entitled to super on the same basis as permanent employees — 11.5% of their ordinary time earnings in 2025–26, with no minimum hours requirement for adults.

When does super need to be paid to employees in 2025–26?

Currently, super must be paid quarterly — the next deadline is 28 October 2026 for the September 2026 quarter. From 1 July 2026, Payday Super requires super to be paid on the same day as wages.

Is overtime included in the super calculation?

Generally no — overtime is excluded from ordinary time earnings (OTE) and does not attract super. However, if your Modern Award or employment contract classifies certain penalty rates as ordinary hours, those amounts are included in OTE.

What happens if I underpay super?

You must pay the Superannuation Guarantee Charge (SGC), which is calculated on total salary and wages (broader than OTE), plus a $20 per employee administration fee and 10% annual interest. SGC is not tax-deductible, unlike regular SG contributions.

Does salary sacrifice reduce my obligation to pay super?

No. Under the Superannuation Guarantee (Administration) Act 1992, salary-sacrificed contributions do not reduce your SG obligation. You must still pay 11.5% SG on the employee's OTE regardless of any salary sacrifice arrangements.

Related: Payday Super 2026 · How To Pay Super Employees Australia · Super Guarantee Rate Australia 2025 · Casual Employee Payroll Australia · Payslip Requirements Australia · Australian Payroll Changes 1 July 2026