Business

Guide on super contribution for employers in Australia

Karthik Rajakumar

25.04.25

Read time 6 minutes

Paying super contributions is a fact of life for every employer in Australia. These contributions support employees’ financial futures and are essential for staying compliant and avoiding costly penalties. It’s important, then, to fully understand your obligations.

If you’re in a position where you wondering if you're one of the employers that have to pay super, then this blog is for you. We will look at super contributions from the perspective of an employer, detailing the rules, rates, due dates, and some case studies with calculations.

Table of contents
What is superannuation and why employers need to pay it? What is the employer super contribution rate? How to work out employer contribution - with examples How often does an employer have to pay super? What are the details required? Is the employer super contribution taxed? Wise Business - Overseas payments at mid-market rate

What is superannuation and why do employers need to pay it?

Superannuation is an investment and savings system in Australia based on employer super contributions. Employers are mandated by law to pay ‘super’ to ensure workers can live comfortably during retirement.

In Australia, employers must pay a minimum superannuation guarantee (SG) rate based on an employee’s earnings.

What are the superannuation eligibility rules in Australia?

Superannuation eligibility rules changed in July 2022. Previously, workers earning less than $450 a month were exempt. That’s no longer the case. You now have to pay super on all earnings, regardless of the amount².

Most employees aged 18 or older qualify for the super guarantee. That means you’ll have to pay if they work full-time or part-time, or are a temporary resident in Australia².

Does the employer need to pay super for overseas employees?

Paying employees in Australia is relatively straightforward, but what if you have workers based overseas? Your superannuation obligations will depend on the tax residency of that employee and the nature of their employment.

Let’s take a look at a couple of examples:

Non-AUS resident overseas employees - You don’t have to pay super for employees or contractors who are not Australian residents and who work overseas².
AUS resident overseas employees - Super doesn’t usually apply for Australian tax residents working overseas, though there can be special cases. For example, if the work is deemed temporary or short-term, you are likely to still have obligations³.

ℹ️ Any employees working in another country temporarily are not usually exempt from super contributions. That means you must continue to pay super while they are away.

What if my employee lives in a country that also has superannuation?

There are times when the host country may have a similar contributions system in place that must also be paid. Australia has a bilateral agreement with 24 countries to help with the issue of ‘super double coverage’⁴. You can apply for a certificate of coverage to be exempt from paying super twice when an employee is in one of the countries⁴.

As the super obligations for overseas workers can be very specific, it’s important to talk to a legal or financial advisor to make sense of your obligations. The Australian Taxation Office (ATO) can also provide guidance.

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What is the employer super contribution rate?

The employer super contribution rate will rise to 12% from July 1, 2025. This rate is a percentage of an employee’s ordinary time earnings (OTE) before tax. You will contribute this amount based on the amount an employee earns per quarter, not annually.

Several factors influence the superannuation rate you pay in Australia. These include:

Government policy - The Australian government sets the super guarantee rate. The SG rate was just 3% back in 1992, before gradually increasing to 9.5% in 2014 and 11.5% in 2024⁵. The increase ensures Australians can build retirement savings for modern living standards.
Ordinary Time Earnings - The contribution amount is based on a percentage of an employee’s gross earnings for work during ordinary hours only, not overtime. This includes commissions, shift loading, and over-award payments⁶.
Employee eligibility - All employees aged over 18 qualify. The number of hours worked isn’t relevant. However, for under-18s, you only have to pay if they work more than 30 hours during a single week².

Does an employer always have to pay super? The ATO has a handy decision tool to help you determine whether employees qualify for the super guarantee.

How to work out your minimum super contribution

Based on the eligibility factors and minimum super guarantee rate, you can start working out exactly how much you must contribute each quarter. Let’s look at a few scenarios to demonstrate some calculations.

Example 1: Employee on a working holiday visa

Temporary residents qualify for superannuation. Mateo, a 25-year-old working full-time at a hillside resort for two months with an $800 per week income, would earn $6,400 in total before tax.

At the 12% rate effective from July 2025, you would have to contribute $768 in superannuation on top of his wages.

Example 2: Under-18 employee with changing hours

Under 18s only qualify for 30+ hour working weeks. Ella is 17 and works at a bakery for 16 hours most weeks and 35 hours a week during school holidays.

You would only have to pay superannuation in the weeks she works 35 hours. The rate is 12% of the amount she earns during a quarter for those longer weeks. The 16-hour work weeks are not eligible until she turns 18.

Example 3: Australian employee working overseas

Australian residents for tax purposes qualify for SG even if they move overseas temporarily. James, a marketer, relocates to Portugal for six months to work remotely but is paid by you, an Australian employer with an Australian contract.

You must continue to pay superannuation as normal. If James earns $5,000 a month, you will contribute $600 as super based on the 12% rate. During the whole six months, this will amount to $3,600 in contributions.

How often does an employer have to pay super?

An employer has to pay super every quarter in Australia. However, the payment deadline doesn’t fall on the final day of the super quarterly dates. You get one month to calculate the contributions owed to your employees and to pay them.

The quarterly superannuation dates follow the calendar year⁷.

1 January–March 31 with payment due by 28 April
1 April–30 June with payment due by 28 July
1 July–30 September with payment due by 28 October
1 October–31 December with payment due by 28 January

You can choose to pay super more frequently, which might be beneficial if your pay periods are fortnightly or monthly, but quarterly is the maximum period by law.

If you don’t settle your super obligations on time, you will have to pay a superannuation guarantee charge (SGC)⁷. This isn’t tax-deductible.

What super details does an employer need?

You’ll need information from your employees when they start a new job so you can start paying superannuation contributions correctly. These details include⁸:

The name of the employee’s super fund and member number
The super fund’s Australian Business Number (ABN)
The employee’s tax file number (TFN)
The employee’s full name, date of birth, and bank account details
Confirmation from the fund that they can accept contributions

When an employee joins your business, you can send them a form to nominate a default super fund, if they are eligible to do so. However, you can’t offer financial advice or provide recommendations about which fund to choose.

You must fill in the relevant details for the Superannuation standard choice form before sending it to an employee⁹. They can then complete it and submit it online via the myGov platform.

Is the employer super contribution taxed?

Contributions are taxed. However, employers have no direct tax obligation for super contributions¹⁰. Your contributions will be taxed at a 15% rate, which is typically lower than income tax, but these are handled by the super fund. Your main role as an employer is to ensure that the super contributions are calculated correctly and paid on time.

Example: If you contribute $10,000 to an employee’s superannuation fund, the fund will pay $1,500 at a 15% tax rate. The employee will then see their super balance increase by $8,500 after tax.

Australian employers must always stay on top of superannuation. Paying employees super guarantee (SG) at the minimum rate, which is set to rise to 12% in July 2025, is required by law every quarter and at least four times a year. Getting it right will ensure you support employees and stay compliant.

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