Superannuation Guarantee for Employers

Superannuation guarantee runs quietly in the background of payroll — until the first time a payment lands late, and the rules turn out to be far less forgiving than most tax deadlines. There is no grace built in: a late super payment triggers a separate charge, extra paperwork, and the loss of a deduction you would otherwise have had. Understanding the mechanics before something slips is much cheaper than learning them afterwards.

What you pay, and on what

Employers pay super guarantee contributions for eligible employees, calculated as a percentage of ordinary time earnings — currently 12%, but check the current rate before relying on it. Ordinary time earnings, or OTE, is broadly what an employee earns for their ordinary hours of work: base salary or wages, most allowances, commissions, and paid leave. Overtime worked genuinely outside ordinary hours is generally excluded. The base matters as much as the rate — applying the right percentage to the wrong base is still a shortfall.

When it has to arrive

For quarters ending on or before 30th June 2026, contributions had to be received by the employee's fund by the 28th day of the month after each quarter ended — 28th October, 28th January, 28th April and 28th July. From 1st July 2026, payday super applies: contributions generally need to be received by the fund within 7 business days of each payday, with a longer window — currently 20 business days — for a new employee's first contribution. Check the current ATO guidance for the details. Received is the operative word: clearing houses can take several business days to pass money on, so paying on the due date itself is often too late. Payday super took effect on 1st July 2026, and the ATO has published a practical compliance approach for its first year — if a payment slips during the transition, talk to your accountant before assuming the worst.

What happens when payment is late

Pay late or short and the super guarantee charge applies. The SGC recalculates the shortfall on a broader earnings base than OTE, adds interest and an administration fee per employee per quarter, and requires you to lodge an SGC statement with the ATO. Unlike super paid on time, the entire SGC amount is not tax deductible. Even a payment that arrives a day late technically falls into this regime — which is why the timing habits matter more than they first appear.

Contractors are not automatically exempt

An invoice and an ABN do not settle the question. A contractor paid wholly or principally for their labour can be an employee for super guarantee purposes, even if they are genuinely a contractor for other purposes. This catches many small businesses in trades, cleaning, IT and consulting, where long-standing contractors have never had super paid on their invoices.

What we commonly see go wrong

• Paying through a clearing house on the due date and assuming that counts. The test is when the fund receives it, not when you press pay.
• Calculating super on base wages alone and missing allowances, commissions or leave loading that belong in OTE.
• Treating every contractor as outside super because they invoice with an ABN.
• Quietly catching up a missed quarter in the next payment instead of lodging the SGC statement — which does not fix the problem and can make penalties worse if the ATO reviews it first.

A worked example

As an illustration: under the quarterly system that applied until 30th June 2026, a small building company pays its September quarter super through a clearing house on 28th October — the due date itself. The money reaches the employees' funds several days later, so every contribution for the quarter is late. The same trap survives under payday super — the 7 business day window is measured to when the fund receives the money, not when you pay. The company now needs to lodge an SGC statement, pay interest and an administration fee for each employee, and loses the deduction for the whole amount. The same payment made a week earlier would have arrived on time, cost nothing extra, and remained fully deductible. The difference was a calendar reminder, not a cash flow problem.

When to get help

If you are unsure which payments belong in OTE, whether a contractor should be receiving super, or how to deal with a quarter that has already been missed, it is worth getting advice before the next due date rather than after. Missed super compounds quietly, and the earlier it is addressed, the more options you have.

What rate of super do I have to pay as an employer?

Super guarantee is calculated as a percentage of each eligible employee's ordinary time earnings — currently 12%, but the rate has changed over recent years, so check the current ATO rate before relying on it.

What happens if I pay super a few days late?

Even a slightly late payment can trigger the super guarantee charge, which adds interest and an administration fee per employee and is not tax deductible. The expected response is to lodge an SGC statement with the ATO rather than quietly paying the amount into the fund late.

Do I have to pay super for contractors?

Sometimes. A contractor paid wholly or principally for their labour can be treated as an employee for super guarantee purposes even if they invoice with an ABN. It depends on the arrangement, so it is worth reviewing each ongoing contractor rather than assuming.