Superannuation Guarantee and Rate Changes


Your guide to the super guarantee (SG) and rate changes

The Superannuation Guarantee (SG) is the compulsory amount your employer must contribute to your super account and is a percentage of your earnings set up the Government. Your employer must pay the SG if you are:

  • 18 years old or over, and
  • receive $450 or more (before tax) in salary or wages in a calendar month[1] *link to Federal Budget changes Blog*

For the 2021-22 financial year, the rate is 10% of your ordinary time earnings. The rate is set to increase by 0.5% per financial year increments to 12% by 1 July 2025.[2]

Financial Year SG Rate
2021 – 22 10.00%
2022 – 23 10.50%
2023 – 24 11.00%
2024 – 25 11.50%
From 1 July 2025 onwards 12.00%

 

How do I know if I’m getting paid the correct SG amount?

To check you are being paid the right amount of SG, the ATO also has an online tool you can use. You simply enter the time period you want to check plus your OTE for each quarter in that period. The tool then calculates how much super your employer should have paid into your super account.

 

Is the SG contribution taxed?

In short, yes. The SG contribution is funds paid to your super, and taxed at a flat 15% tax rate going into the fund. Meaning if you were to receive $100 from SG contributions, you’re fund would withhold $15 and contribute the remaining $85 to your superannuation account.

However, if you are fortunate to be paid $250,000 (Division 293 threshold) or more, you will have to pay an additional 15% on your contributions. This is calculated at the end of the financial year, and if you have to pay you will be sent a notice of assessment. [3]

 

Is there a maximum I can contribution?

As generally, the tax paid on superannuation is lower than an individuals taxable income, it creates incentives to defer and contribute more towards superannuation. However, be mindful that there are pre-tax contribution cap limits.

For the 2021-22 financial year, the concessional contribution caps are $27,500 and also includes SG contributions from employment. For example, if you are paid $100,000 in the 2021-22 financial year, your employers will pay $10,000 towards your super, meaning you will only be able to contribute an additional $17,500.

*Link to Tips for planned and unplanned career break*

[1] the Government announced in the 2021 Budget that it proposes to remove the $450 minimum income threshold from 1 July 2022

[2] www.ato.gov.au/rates/key-superannuation-rates-and-thresholds/?page=22

[3] https://www.ato.gov.au/individuals/super/in-detail/growing-your-super/division-293-tax—information-for-individuals/