Superannuation Guarantee Rate 2024 – A Complete Guide

When it comes to securing your financial future, superannuation plays an important role. One of the primary contributors to your superannuation account is the Superannuation Guarantee (SG).  This article is about how the SG works and how it impacts your retirement savings.

The primary type of contribution consistently deposited into your superannuation account is typically the Superannuation Guarantee (SG). This refers to the mandatory contribution made by your employer, regardless of their size, into a superannuation fund on your behalf.

The SG is a crucial component of Australia’s retirement savings system. It ensures that eligible employees receive contributions to their superannuation (super) fund from their employers.

Superannuation Guarantee (SG) is a portion of your overall earnings that your employer contributes. The Australian Government sets the percentage, which can change over time. So, it’s essential to stay informed about any updates! Click here to learn all details about Superannuation

To calculate the SG rate, you need to determine the employee’s ordinary time earnings (OTE) and apply it to the current SG rate (11.5% for 2024) then multiply both together to find out about your SG contribution. OTE is the amount you receive by working regular hours, which includes commission and shift loading. For further information on the OTE, you can visit the Australian Taxation Office website.

The current super rate, which most employers must pay to their employees, is 11% of their ordinary time earnings (OTE). This should be deposited into your employee super account. It is expected that this rate will rise by 0.5% every year until July 1st, 2025, when it will reach 12%.  Employees should check their pay slips to make sure that they are being paid super at the new, legally required 11.5% SG rate after the 24/25 financial year begins.

Ordinary time earnings (OTE) refer to the regular income components used to calculate superannuation contributions. Here’s what’s included and excluded:

Included in OTE

Excluded from OTE

Remember that OTE plays an important  role in determining superannuation contributions. Employers base their contributions on these ordinary time earnings to help you build your retirement savings.

In 1992, the superannuation guarantee was introduced at a modest rate of 3%. Prior to that, employers were not obligated to contribute to their employees’ retirement accounts. However, times have changed, and now the superannuation guarantee plays a vital role in the system. Its purpose is to boost the amount saved for retirement and reduce reliance on government pensions when it comes to retirement income.

Period	Super guarantee rate
1 July 2002 – 30 June 2013	9.00%
1 July 2013 – 30 June 2014	9.25%
1 July 2014 – 30 June 2021	9.50%
1 July 2021 – 30 June 2022	10.00%
1 July 2022 – 30 June 2023	10.50%
1 July 2023 – 30 June 2024	11.00%
1 July 2024 – 30 June 2025	11.50%
1 July 2025 – 30 June 2026 and onwards	12.00%

AustralianSuper provides a useful application that notifies you each time a contribution is made to your account, facilitating efficient account management.

Discussions and actions related to increasing the super guarantee have been ongoing since the inception of compulsory superannuation. As early as 1995, just three years after its introduction, economists were cautioning that the current super contribution rates might not suffice to provide employees with a comfortable, independent income during retirement. In recent times, governments have widely acknowledged the necessity of raising the super guarantee to 12% to adequately address the future needs of Australian retirees.

It is essential that your employer is cognizant of the increased Super Guarantee (SG) rate. The Australian Government legally mandated superannuation payments. If you meet the eligibility criteria, your employer is required by law to make superannuation contributions on your behalf.

Review your pay slips to verify that your superannuation is being paid at the updated SG rate of 11.5% from July onwards. It’s important to note that superannuation payments are often made on a quarterly basis by employers, so the increase in your contribution may not be visible until after September 2024.

If your employer fails to deposit the required Superannuation Guarantee (SG) contributions into your superannuation account by the quarterly deadline, they may be liable to pay a Superannuation Guarantee Charge (SGC) to the Australian Taxation Office (ATO). The SGC comprises the outstanding SG amounts owed to employees, along with interest and an administrative fee.

Employers who miss the SG payment deadline must promptly submit an SG Statement and settle the SGC.

All employees above 18, irrespective of whether they are full-time, part-time, or casual workers, are generally eligible for SG contributions. This eligibility also extends to most individuals working as contractors. But, if they are under 18 they must have to work more than thirty hours a week or more to qualify for SG.

Company Directors

Employees who hold positions as company directors, have family members employed within the same business, or receive superannuation pension, annuity, or transition-to-retirement payments are eligible for Superannuation Guarantee (SG) contributions. However, if you are self-employed as a sole trader or part of a partnership, you are not obligated to make SG payments for yourself.

Individuals with High Income

However, there is an exception for individuals with high income. If your earnings surpass $62,270 per quarter (equivalent to $249,080 annually), your employer is not obligated to make SG contributions on the income exceeding this threshold. This provision ensures that you remain within the limit of concessional contributions, thereby avoiding any additional tax liabilities.

Temporary Residents

Temporary residents also have the right to receive Superannuation Guarantee (SG) contributions into their superannuation accounts.

Employers must pay SG contributions at least every three months. However, if you leave Australia after working here on a temporary visa, you can claim your super (minus tax) as a Departing Australia superannuation payment (DASP) once your visa has expired . Keep in mind that ordinary time earnings, which include over-award payments, commissions, allowances, and bonuses (but not overtime), determine the SG entitlement. So, even as a temporary resident, you’re still eligible for SG contributions from your employer. 

Your pay slip has all the information regarding your SG contribution which was deducted from your before-tax income together with your salary and any taxes included.

Non Resident

If you’re not an Australian resident or if your work takes place outside Australia, your employer isn’t obligated to make Superannuation Guarantee (SG) contributions. This applies if you’re paid by a non-resident employer for work done abroad, if you’re a senior foreign executive on specific visas, or if you’re temporarily working in Australia for an overseas employer and covered by super provisions in a bilateral social security agreement.

Contractors SG

If you work as a contractor, you might still be eligible for Superannuation Guarantee (SG) payments, even if you have an Australian Business Number (ABN). Contractors whose contracts primarily involve their personal labor and skills, rather than a specific outcome, and who are required to perform the contracted work themselves, should receive SG contributions.

Multiple Employers

If you have more than one employer, you have the option to opt out of receiving Superannuation Guarantee (SG) contributions from some of them. By doing so, you can prevent unintentionally exceeding the annual concessional (before-tax) contributions cap, which is currently set at $27,500 for the 2023–24 financial year. To be eligible for this choice, you should anticipate that the total of all your employers’ mandated concessional contributions will surpass your concessional cap.

If you’re an employee with multiple employers and your total mandated concessional contributions are expected to exceed the annual cap (currently $27,500 for the 2023–24 financial year), you can submit a ‘Super Guarantee opt-out for high-income earners with multiple employers’ form to the Australian Taxation Office (ATO). Once approved, you’ll receive an SG employer shortfall exemption certificate. Share this certificate with one or more of your employers, allowing them to be exempt from their Super Guarantee (SG) obligation for up to four quarters within the financial year.

Keep in mind that you must still receive SG contributions from at least one employer each quarter, and your application should be lodged at least 60 days before the next quarter begins

Even if you give your employer an SG employer shortfall exemption certificate, they can still choose to continue making Superannuation Guarantee (SG) contributions on your behalf. It’s essential to have a conversation with your employer to determine whether they will accept the exemption certificate before you apply. Keep in mind that applying for an exemption might impact your pay and other entitlements, so it’s a good idea to consult with an accountant or tax agent before proceeding with the release form.

Superannuation Guarantee (SG) contributions are calculated based on your Ordinary Time Earnings (OTE) up to a specific limit known as the Maximum Super Contribution Base (MSCB). 

If your earnings exceed this limit in a given quarter, your employer is not obligated to make SG contributions for the portion of your income above the MSCB.

Superannuation Guarantee (SG) contributions directed to your super account receive concessional tax treatment. These contributions are considered ‘before-tax’ because they are made from untaxed money. Once they enter your super account, they are subject to a special low tax rate of 15%. For many individuals, this tax rate is lower than their regular income tax rate

If your income, combined with any concessional (before-tax) super contributions, exceeds $250,000 in a given financial year, you will be subject to an additional 15% tax on concessional contributions above this threshold. This Division 293 tax is in addition to the standard 15% contributions tax applied when your concessional contributions enter your super account.