The superannuation guarantee (SG) is the compulsory employer contribution to employees' superannuation funds. The rate increases to 12% of ordinary time earnings (OTE) from 1 July 2025 — the final step in the legislated schedule that began at 9.5% in 2014.
For Australian bookkeepers, super guarantee compliance has become increasingly complex as the rate rises, as more workers gain coverage (including some contractors and casual workers), and as the ATO's enforcement posture has shifted from education to active compliance action.
This guide covers what bookkeepers need to know in 2026 to keep their clients SG-compliant.
The super guarantee rate schedule
| Financial year | SG rate |
|---|---|
| 2023–24 | 11.00% |
| 2024–25 | 11.50% |
| 2025–26 | 12.00% |
| 2026–27 onwards | 12.00% (legislated cap) |
The rate applies to ordinary time earnings (OTE), not total earnings. OTE includes base salary, ordinary hours payments, commissions, allowances for ordinary hours, and leave loading — but generally excludes overtime wages.
A common payroll error is applying the SG rate to total gross wages including overtime. This results in an SG overcalculation. While overcalculation doesn't trigger an ATO liability (you can't be penalised for paying too much super), it overstates the employer's SG expense and understates the payroll cost.
Who must receive super guarantee contributions
Coverage has expanded significantly since the original SG Act. As of 2026, employers must contribute for:
Employees working 18 or more hours per week: The original threshold of $450/month minimum earnings was removed from 1 July 2022. All employees (full-time, part-time, casual) now receive SG regardless of how much they earn in the month, provided they are 18 or older.
Employees under 18: Still require 30 or more hours per week of work before SG applies.
Contractors paid mainly for labour: Workers paid for the provision of their own labour — where the contract is primarily for services of the individual, not a product or result — are deemed employees for SG purposes, regardless of the contractual form. This is the most commonly misunderstood aspect of SG coverage.
Working directors: Directors of companies who receive remuneration for their work in the company are generally entitled to SG on that remuneration, unless they are exempted (e.g., directors who are not employees under the Act's definition). Most working directors in private companies should receive SG.
Exempt from SG:
- Non-resident employees paid for work done outside Australia
- Employees paid for work under certain prescribed salary sacrifice arrangements
- Workers under a genuine business-to-business arrangement (where they provide services through a company or trust, engage others, and are not primarily supplying their own labour)
Timing: the quarterly payment deadline
SG must be paid to an eligible super fund by the 28th of the month following each quarter:
| Quarter | Payment due |
|---|---|
| Jul–Sep | 28 October |
| Oct–Dec | 28 January |
| Jan–Mar | 28 April |
| Apr–Jun | 28 July |
Late payment results in automatic Superannuation Guarantee Charge (SGC). The SGC is calculated differently from the SG itself — it's based on earnings base (not just OTE), applies an interest component (currently 10% p.a.), and adds an administration levy of $20 per employee per quarter.
Critically, SGC is NOT deductible to the employer — unlike SG paid on time, which is fully deductible. A late SG payment therefore costs the employer both the penalty and the lost deduction.
For clients who miss a quarterly deadline: the employer must lodge a Superannuation Guarantee Statement with the ATO and pay the SGC. The employer can no longer pay to the super fund to make it right — once the deadline is missed, only the ATO process is available.
The clearing house: how super actually moves
Most employers use a super clearing house — a service that receives a single payment from the employer and distributes it to each employee's nominated fund. The ATO operates the Small Business Superannuation Clearing House (SBSCH), free for employers with fewer than 20 employees or turnover under $10M.
For bookkeepers managing client payroll, the key bank reconciliation entries are:
- Employer payment to clearing house: The employer transfers a single amount to the clearing house. This is coded as a debit to Superannuation Payable (a liability account), not directly to Super Expense.
- SG accrual entry (per pay run): Each time payroll is processed, debit Super Expense and credit Superannuation Payable. The liability accumulates during the quarter.
- Clearing house payment: The payment to the clearing house reduces the Superannuation Payable liability to zero.
The SG liability should be cleared to zero (or close to it) after the clearing house payment processes. Any residual balance in Superannuation Payable at quarter-end requires investigation — it typically means either the payment wasn't processed or an accrual was made but not paid.
Ordinary time earnings: common calculation errors
OTE is the foundation of the SG calculation. Getting OTE wrong either underpays super (an ATO liability) or overpays (a financial loss to the employer with no offsetting benefit).
What's included in OTE:
- Base salary for ordinary hours
- Over-award payments for ordinary hours
- Commissions and bonuses (if paid for ordinary hours work)
- Leave loading
- Shift penalties for ordinary hours (not overtime shift penalties)
- Director fees for time worked
What's excluded from OTE:
- Overtime wages (payments specifically for work beyond ordinary hours)
- Reimbursements (expense reimbursements are not earnings)
- Workers' compensation payments
- Genuine redundancy payments
- Fringe benefits (the cash-equivalent value of fringe benefits is not OTE)
- Salary sacrifice to super (the sacrifice reduces the salary before OTE is calculated, so SG applies to the post-sacrifice salary)
The salary sacrifice trap: When an employee sacrifices salary to super, the pre-sacrifice salary is higher than the after-sacrifice salary. SG should be calculated on the post-sacrifice ordinary time earnings. However, the employer may choose (and some enterprise agreements require) to calculate SG on the pre-sacrifice salary — this is called preserving SG on the pre-sacrifice base.
Check each client's payroll configuration and employment agreements to determine which basis applies. Inconsistent calculation creates exposure.
Super guarantee and the BAS
Super contributions do not appear as a GST item on the BAS. They are not subject to GST, and there is no super-related label on the quarterly BAS.
However, the BAS does interact with super in one indirect way: the W1 (gross wages) and W2 (PAYG withholding) labels on the BAS are used by the ATO to cross-reference payroll data against STP reports. If the BAS W1/W2 figures are inconsistent with STP data, the ATO may flag the account for review — and SG compliance is often included in any resulting review.
Bookkeepers should ensure that W1 (before-tax wages) on the BAS matches the STP YTD wages figure for the same period.
Superannuation stapling: what it means for new hires
Since November 2021, when an employee does not nominate a super fund, the employer cannot default them into the employer's default fund. Instead, the ATO's "stapling" rules require the employer to look up the employee's existing super fund through the ATO's online portal and contribute to that stapled fund.
For bookkeepers helping clients with new hire setup:
- Have the employee complete a Standard Choice Form — if they nominate a fund, use that fund
- If no form is returned (the employee's choice applies) or if the employee has no existing fund, use the ATO portal to request the employee's stapled fund
- If no stapled fund exists (e.g., a first-time worker), use the employer's default MySuper product
Failure to follow the stapling rules exposes the employer to an SG shortfall if contributions go to the wrong fund and that fund does not accept the payment.
Frequently asked questions
Can I claim an ITC on super contributions?
No. Superannuation guarantee contributions are not subject to GST — they are financial payments, not supplies of goods or services. No ITC is claimable, and no GST is payable by the super fund. Code super contributions as N-T.
What if the client underpays super in one quarter — can they top it up in the next?
No. Super guarantee obligations are quarterly. If an employer underpays in Q1, they must lodge an SGC statement for the shortfall amount — paying extra in Q2 does not cure the Q1 shortfall. The SGC includes interest and administration charges from the Q1 due date.
Is salary sacrifice included in SG calculations?
Salary sacrifice reduces the OTE on which SG is calculated (unless the employment agreement specifies that SG is maintained on the pre-sacrifice base). The super contributions made through salary sacrifice are in addition to, not instead of, the SG obligation — they are employee contributions, not employer SG.
What is the SG rate for a contractor deemed to be an employee?
The same rate as employees: 12% of OTE for 2025–26. The deemed employee rules mean the contractor is treated as an employee for SG purposes only. The employer must calculate OTE on the amounts paid to the contractor for their labour and contribute accordingly.
This article was last reviewed on 27 May 2026 against current ATO SG guidance. The SG rate and coverage rules change annually. Always confirm current requirements at ato.gov.au/super. This is general guidance, not specific tax or legal advice.