Superannuation Guarantee Rate explained

The superannuation guarantee is the amount of super your employer is legally obligated to pay you. Here's how the rate works and who is eligible to earn it.

We’re reader-supported and may be paid when you visit links to partner sites. We don’t compare all products in the market, but we’re working on it!

The superannuation guarantee rate

The superannuation guarantee rate is the amount of money Australian employers are required to pay their employees towards their superannuation. The current super guarantee rate is 10% of what you earn annually.

This means that your employer must pay at least 10% of your annual income into your nominated super fund. While this is the minimum amount they need to pay, employers can choose to pay a higher super rate than this as a company benefit and a way to attract and maintain good staff.

Example of the super guarantee rate

Because the super guarantee is a percentage of your earnings this means the more you earn, the more super you'll be paid by your employer.

Let's say you work full time in an office and your annual base salary is $90,000. With a super guarantee rate of 10%, your employer would legally be required to pay you at least $9,000 into your super fund for the year. If the following year you got a pay rise and your salary increased to $97,000, your employer would then be required to pay you $9,700 for that year.

How the super guarantee is paid

Your employer is required to pay your super at least 4 times per year. They can choose to pay your super more frequently than this, but once per quarter is the minimum. This means that your annual super guarantee payments will be divided up into 4 (or more) payments.

Using the above example again, let's say you earn $90,000 and your employer needs to pay you $9,000 in super for the year. This would be broken down into 4 payments of $2,250 instead of the one lump sum payment. Basically, the super guarantee rate of 10% would be applied to your quarterly earnings of $22,500.

Because it's paid 4 times per year, if you earn a pay rise half way through the year you'll immediately start earning more super too. For example, let's say the first 4 months of the year you salary is $90,000 and your quarterly super payment is $2,250. However, let's pretend in the next quarter you get a big pay rise and your new salary is $120,000. The super guarantee rate would be applied to your new quarterly earnings of $30,000 and you'd instead receive $3,000 in super.

Changes to the superannuation guarantee rate

The superannuation guarantee rate was 9.5% up until 30th June 2021, when it increased to 10%.

The super guarantee rate is scheduled to gradually increase by 0.5% per year until it reaches 12% in July 2025.

Who pays superannuation in Australia?

All Australian employers are required to pay the super guarantee to their employees. Employers need to pay super into their employee's nominated fund at least 4 times a year. Australians who are self-employed generally are not required by law to pay themselves super, but it's definitely a wise idea to do so.

There are a few situations where employees are not legally required to pay superannuation, including:

  • If the employee is under 18 and works less than 30 hours per week
  • If the employee is not an Australian resident and completes the work outside of Australia

Problems with the super guarantee rate

The super guarantee rate is a great piece of legislation that provides a minimum safety net of retirement savings for working Australians. However, that's not to say there are no issues with the super guarantee. Here are a few things to consider:

Do you earn much money?

Because the super guarantee rate is applied to your annual earnings, if you don't earn that much, you won't get much in the way of super payments. You're entitled to top up your own super as well, and don't need to reply on your employer contributions.

Do you work for yourself?

If you're a sole-trader or you're self-employed, you aren't required to pay yourself the super guarantee rate. However, it's a very good idea to do so anyway. Just like setting aside money for tax each year, it's a good habit to also set aside money for your super.

Are you on parental leave?

If you're taking a lot of time out of the workforce to raise kids, you might be entitled to receive your standard pay from your employer for a set length of time. You may also be entitled to government parental leave payments. However, keep in mind that these payments don't necessarily include the super guarantee.

One thing you can do to help boost your super while you're not getting paid the super guarantee is to make sure you're in a low-fee, high-performing super fund.

Promoted
Virgin Money Super LifeStage Tracker has one of the lowest fees in the market and has strong 3 year performance. It invests in a mix of assets in line with your age, reducing your risk as you near retirement. The investment team was named a Responsible Investment Leader 2020 and 2021 by the Responsible Investment Association Australasia.
Promoted
Finder Award
Finder Awards Winner 2019: Best Super Fund - Growth

Sunsuper Lifecycle Balanced is a MySuper fund that invests in a large range of asset classes and adjusts your investment mix in line with your age.

Australian super funds

Name Product Last 1 year performance (p.a.) Last 3 year performance (p.a.) Last 5 year performance (p.a.) Last 10 year performance (p.a.) Fees on $50k balance (p.a.)

AustralianSuper - Pre-mixed, Balanced option

Finder Award
AustralianSuper - Pre-mixed, Balanced option
+20.46%
+9.6%
+10.46%
+9.74%
$476
AustralianSuper is an award-winning industry super fund and the largest super fund in Australia. The Balanced fund invests in a mix of different assets like shares, property and cash.

Virgin Money Super - LifeStage Tracker

Virgin Money Super - LifeStage Tracker
+22.17%
+10.04%
New Fund
New Fund
$363
Virgin Money Super LifeStage Tracker has one of the lowest fees in the market and has strong 3 year performance. It invests in a mix of assets in line with your age, reducing your risk as you near retirement. The investment team was named a Responsible Investment Leader 2020 and 2021 by the Responsible Investment Association Australasia.

Sunsuper Lifecycle Balanced

Finder Award
Sunsuper Lifecycle Balanced
+20.62%
+8.77%
+9.84%
+9.06%
$558
Sunsuper is an award-winning super fund with more than 1.4 million members. Its Lifecycle Balanced option invests your super in a mix of growth assets, and reduces your risk when you're near retirement.

Australian Ethical Super Balanced

Green Company
Australian Ethical Super Balanced
+17.96%
+10.33%
+9.67%
+9.01%
$622
Certified by the Responsible Investment Association Australasia.
Australian Ethical seeks to invest in companies that have a positive impact on the planet, people and animals, such as renewable energy and healthcare while avoiding investments in coal, oil, tobacco and gambling.

Spaceship GrowthX

Spaceship GrowthX
+23.41%
+15.25%
New Fund
New Fund
$536
This is a high-risk investment option that aims to deliver high returns over the long term.
Spaceship's GrowthX fund invests heavily in technology ETFs with high exposures to Australian and international shares. Performance figures and fees supplied by Spaceship, not Chant West.

QSuper Lifetime - Aspire 1

QSuper Lifetime - Aspire 1
+17.11%
+9.02%
+8.61%
New Fund
$360
QSuper is one of the largest profit-for-members funds in Australia. QSuper Lifetime continually adjusts your investment mix in line with your age and your super account balance.

UniSuper Balanced

UniSuper Balanced
+17.6%
+9.23%
+9.55%
+9.55%
$326
UniSuper is an industry super fund and one of Australia's largest super funds with more than 450,000 members. Its Balanced option invests in a mix of different asset classes and charges some of the lowest fees of all default super products.

Aware Super Growth

Aware Super Growth
+18.02%
+8.81%
+9.8%
+8.97%
$519
Aware Super is a not-for-profit fund with more than 750,000 members. The MySuper product invests your super in a pre-mixed Growth fund until you’re 60, then it’ll switch to Balanced.

HESTA Balanced Growth

HESTA Balanced Growth
+19.03%
+8.48%
+9.39%
+8.87%
$533
HESTA is an industry super fund for the health and community services sector and open to all Australians. The Balanced Growth fund invests in a mix of asset classes without taking on too much, or too little, risk.

Australian Catholic Super Lifetime - Grow

Australian Catholic Super Lifetime - Grow
+17.36%
+7.42%
New Fund
New Fund
$528
A Catholic super fund open to all Australians and designed for people working in Catholic education, healthcare or aged care.The Lifetime One fund option changes your investment mix as you get older.

Verve Super Balanced

Verve Super Balanced
+12.85%
New Fund
New Fund
New Fund
$691
Verve Super is an ethical super fund tailored for women. It seeks to invest in companies making a positive impact, such as renewable energy and women in leadership, while avoiding those that cause harm, such as fossil fuels, tobacco and guns.

Superhero Super Autopilot

Superhero Super Autopilot
+14.52%
+8.39%
New Fund
New Fund
$429
Superhero Super Autopilot allows you to invest up to 30% of your super in different themed ASX shares and ETFs, with at least 70% of your balance invested in the Vanguard Global Diversified Index Portfolio. Performance and fees are based on having 100% of your balance in the index portfolio.

REST Super - Core Strategy

REST Super - Core Strategy
+17.43%
+7.17%
+8.26%
+8.43%
$467
REST is an industry super fund tailored towards the retail sector and open to all Australians with almost 2 million members. The Core Strategy is a diversified investment portfolio that balances risk and return.

AustralianSuper - Socially Aware

AustralianSuper - Socially Aware
+19.4%
+7.89%
+9.25%
+9.2%
$501
The AustralianSuper Socially Aware option doesn't invest in Australian or international companies that directly own coal and fossil fuel reserves, produce tobacco or those which have single-gender boards. Investment performance as of 30 June 2020.

Aware Super - Diversified Socially Responsible Investment

Aware Super - Diversified Socially Responsible Investment
+15.23%
+8.1%
+8.28%
+8.12%
$406
The Aware Super Diversified Socially Responsible Investment is a pre-mixed investment option that excludes companies operating in the tobacco, ammunition, gambling, alcohol, forest logging and pornography industries, as well as companies that attribute 20% or more of their revenue to coal, oil and gas.

Sunsuper - Socially Conscious Balanced

Sunsuper - Socially Conscious Balanced
+19.6%
+8.76%
+8.83%
+8.25%
$463
Certified by the Responsible Investment Association Australasia.
The Sunsuper Socially Conscious Balanced option avoids investment in companies that have significant exposure (more than 5% of revenue) to alcohol, tobacco, gambling, pornography, coal and nuclear power manufacturing. Investment performance as of 30 June 2020.
loading

Compare up to 4 providers

The information in the table is based on data provided by Chant West Pty Ltd (AFSL 255320) which is itself supplied by third parties. While such information is believed to be accurate, Chant West does not accept responsibility for any inaccuracy in such information. Chant West’s Financial Services Guide is available at https://www.chantwest.com.au/financial-services-guide . Finder offers no guarantees or warranties about the data and we recommend that users make their own enquiries before relying on this information. Performance, fees and insurance data is based on each fund's default MySuper product. Where the performance, fees and insurance data for the MySuper fund vary according to the member's age, results for individuals between 40-49 years of age have been shown. Past performance is not a reliable indicator of future performance.

*Past performance data is for the period ending June 2021.

More guides on Finder

Ask an Expert

You are about to post a question on finder.com.au:

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com.au is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Finder only provides general advice and factual information, so consider your own circumstances, or seek advice before you decide to act on our content. By submitting a question, you're accepting our Terms of Use, Disclaimer & Privacy Policy and Privacy & Cookies Policy.
Go to site