Super guarantee rate: What are the rules for employer super contributions?
Are you just starting out in your career, or are you a seasoned expert within your field? Either way, you might be thinking about your super fund and what your employer obligations are for paying you super.
Maybe you’re looking to gain a better understanding of what superannuation is, or want to know if there are any new changes that might affect your retirement fund.
If so, let’s get into it.
What is superannuation?
Superannuation, commonly referred to as super, is money that’s set aside while you’re working to support your financial needs in retirement. Your super is part of your income and is deposited into a fund that is invested across a range of assets to help grow your balance.
Super is part of a compulsory system put in place by the Australian government to ensure that you have some money saved up for when you retire.
Growing your super balance
If you’re working and are eligible, your employer should be making contributions to your nominated super fund on your behalf. Alternatively, if you don’t have a super fund, your employer could select their default super fund to transfer your super into. You can access these funds when you’re either 65 years old, or you have retired.
But you don’t have to wait for your employer to make contributions - in addition to employer contributions you can also deposit into your fund yourself.
Concessional versus non-concessional contributions
The amount you’re allowed to deposit into your super fund in one financial year depends on whether it’s a concessional contribution, or a non-concessional contribution.
A concessional contribution refers to diverting some of your salary towards your super fund by making a request with your employer. It allows you to contribute up to $27,500 in your super fund in one year, and you might pay a tax rate of 15% for doing so. If this percentage is less tax than what you would normally pay with your income (and you’ve got room in your budget) you might want to consider making a concessional contribution.
Alternatively, there’s the non-concessional route. It’s when you use your after-tax salary to make payments towards your super. Generally speaking, you’re allowed to contribute up to $110,000 per year with this option.
Along with these optional contributions, your employer will also provide you with the super guarantee rate if you’re eligible.
What is the super guarantee rate?
In addition to your salary, the super guarantee rate is a percentage of contributions your employer is required to pay into your super account on your behalf.
At present, the super guarantee rate is 11% but you can expect this rate to increase every financial year until 1 July 2025. So, from 1 July 2025, your super guarantee rate will be at 12%.
Your employer will make compulsory super contributions to your super fund at least four times a year (quarterly). However, they might choose to do so on a monthly or weekly basis, too.
While employers have flexibility now on how often they pay, from 1 July 2026 it’ll be mandatory for employers to pay your super (if you are eligible) on your payday.
To confirm that you’re being paid the super guarantee rate, you can check your MyGov account to look at the contributions made towards your super fund. If you’re concerned that your employer hasn’t paid you the right amount, you might want to bring it up with them.
Who is eligible for a super guarantee rate?
According to the Australian Tax Office, there are some conditions that may affect your eligibility for the super guarantee.
So, here are some instances where your employer is obligated to pay you with a super guarantee rate:
- Regardless of the number of hours you work per week, you might be receiving super if you are over 18 years old.
- You may also be eligible if you work more than 30 hours per week, but are under 18 years old.
There can be penalty fees involved if your employer doesn’t pay your super on time. This is known as a super guarantee charge.
Thinking of consolidating your super fund?
If you’ve changed your line of work or employer, you might find that you have a few super funds set up. Consolidating them into a single fund might be something you’re thinking of doing and ultimately this can mean easier management of your super.
Furthermore, consolidating your super could mean that you save money on fees by only paying for the one account.
If you have changed employers or addresses, there is a chance that you might have some lost super sitting in an old account. The ATO has a lost super search which will reunite any unclaimed super money it holds for you into one of your active super accounts.
Want to read up on other superannuation topics? Mozo has a range of guides which cover useful superannuation topics ranging from ethical investments through to superannuation targets. Check them out at our superannuation guides hub.