How superannuation is calculated is one of the most common questions Australians ask as they move through their working life. Whether you’re checking your payslip, comparing job offers, or trying to work out how much you’ll have at retirement, understanding how super is calculated gives you a real advantage.
In this guide, we cover the current superannuation guarantee rate in Australia for 2025-26, how super is calculated on your wages, what counts as ordinary time earnings, and the factors that shape your final balance.
What Is the Current Superannuation Guarantee Rate in Australia?
The current superannuation guarantee rate in Australia is 12%, effective from 1 July 2025. This is the final rate under the legislated schedule of increases introduced by the Australian Government, which has been gradually rising from 9.5% in 2021. The 12% rate is now permanent, with no further increases planned.
This means your employer must contribute 12% of your ordinary time earnings (OTE) into your nominated super fund on top of your salary. It is not deducted from your pay, it is an additional employer obligation.
Superannuation rate history (recent years):
| Financial year | SG rate |
|---|---|
| 2021-22 | 10.00% |
| 2022-23 | 10.50% |
| 2023-24 | 11.00% |
| 2024-25 | 11.50% |
| 2025-26 onwards | 12.00% |
Source: ATO: Superannuation Guarantee rates and thresholds
How Is Super Calculated in Australia?
Super is calculated as a percentage of your ordinary time earnings (OTE). At the current superannuation guarantee rate of 12%, the formula is straightforward:
Super contribution = OTE x 12%
So if you earn $80,000 per year in ordinary time earnings, your employer must contribute $9,600 into your super fund annually.
The contributions must be paid at least quarterly, though from 1 July 2026 the government is introducing Payday Super, which will require employers to pay super with every pay cycle rather than quarterly.
Simple worked examples at the current 12% rate:
| Annual salary (OTE) | Employer super contribution (12%) |
|---|---|
| $50,000 | $6,000 |
| $70,000 | $8,400 |
| $80,000 | $9,600 |
| $100,000 | $12,000 |
| $120,000 | $14,400 |
Note: there is a maximum contribution base of $62,500 per quarter in 2025-26 (or $250,000 per year). Employers are not required to pay the 12% on earnings above this threshold.
What Is Super Calculated On? Ordinary Time Earnings Explained
Understanding what super is calculated on is just as important as knowing the rate. Not everything you earn attracts super.
Included in OTE (super is calculated on these):
- Base salary or wages
- Shift loadings and allowances
- Most commissions
- Bonuses (unless irregular or discretionary)
- Paid leave including annual leave, sick leave, and long service leave
Not included in OTE (no super on these):
- Overtime pay
- Expense reimbursements
- Redundancy payments
- Some allowances such as meal or travel reimbursements
This is why two employees on similar take-home pay can end up with different super outcomes. If a significant part of your earnings comes from overtime, that component doesn’t attract super contributions.
For the full technical definition of ordinary time earnings, refer to the ATO’s guidance on how much super to pay.
Is the 12% Super Rate Included in Your Salary Package?
This is one of the most searched questions around super calculation in Australia: is 12% super included in the salary package, or is it on top?
The answer depends entirely on how your employment contract is structured, and this genuinely matters because the two approaches produce very different outcomes.
Super on top of salary (most common for salaried employees): Your employer pays 12% of your base salary as an additional cost. If your salary is $80,000, you take home $80,000 and your employer separately contributes $9,600 to your super. Your total package cost to the employer is $89,600.
Total remuneration packaging (common for senior roles and some contracts): Your package of, say, $89,600 includes the super. Your base salary in this case would be $80,000 and the $9,600 super comes out of the package. The key difference: when the SG rate increased to 12% on 1 July 2025, employees on total remuneration packages effectively saw a small reduction in take-home pay because more of the fixed package went to super.
If you’re unsure which applies to you, check your employment contract or ask your payroll team. The terminology used is usually either “plus super” (super is on top) or “inclusive of super” or “total package” (super comes out of the stated amount).
From 1 July 2025, all contracts that said “super is 11.5%” should have been updated. If your payslip still shows 11.5%, raise it with your employer as they are legally required to contribute at the current rate of 12%.
How Super Grows Over Time: More Than Just the Rate
Super calculation isn’t just about the 12% your employer contributes. Once contributions hit your fund, they’re invested and compounding over time. That’s where the real growth happens.
Your super balance grows through four things working together:
1. Employer contributions at the current 12% SG rate.
2. Voluntary contributions you make yourself, either before tax (salary sacrifice, counted toward the $30,000 concessional cap in 2025-26) or after tax (counted toward the $120,000 non-concessional cap).
3. Investment returns from your fund’s portfolio of shares, property, bonds, infrastructure, and cash. The return depends on which investment option you’re in. A growth option has historically returned around 7-9% per annum over the long term, while a conservative option typically returns 3-5%.
4. Tax concessions inside super. Employer contributions and earnings in the accumulation phase are taxed at just 15%, significantly lower than most people’s marginal income tax rate. In the pension phase after retirement, earnings are tax-free.
Updated worked example at the correct 12% rate:
- Annual salary: $70,000
- Employer super contribution (12%): $8,400 per year
- Over 10 years (contributions only, no salary growth): $84,000
- With 6% annual investment returns compounding: approximately $117,000+
This illustrates why small increases in the SG rate matter. The increase from 11.5% to 12% on a $70,000 salary adds $350 in extra employer contributions per year, which compounds meaningfully over a full working life.
What Percentage Is Superannuation in Australia? A Quick Reference
Several GSC searches arrive at this page looking for a simple answer to “what percentage is super in Australia” or “what is the super percentage.” Here’s the plain summary:
- Current super percentage (2025-26): 12% of ordinary time earnings
- Who pays it: Your employer, as a compulsory obligation on top of your salary
- When it applies: For all eligible employees in Australia
- Is it permanent: Yes. 12% is the final legislated rate with no further increases scheduled
- Does it include overtime: No. Super is not calculated on overtime pay
The ATO’s YourSuper comparison tool also lets you check your current fund’s performance, which is worth doing alongside understanding how your contributions are calculated.
Factors That Influence How Much Super You End Up With
Knowing the super calculation rate is just the start. Several other factors shape what you actually have at retirement.
Your salary level. The 12% is applied to your OTE, so salary growth directly lifts your super contributions throughout your career.
Contribution caps. The government caps how much can go into super with favourable tax treatment. For 2025-26, the concessional (before-tax) cap is $30,000 per year, which includes your employer’s 12% contribution plus any salary sacrifice you make. The non-concessional (after-tax) cap is $120,000. Exceeding these caps results in excess tax.
Career breaks. Time out of the workforce means employer contributions pause. This affects women disproportionately due to caring responsibilities, which is one reason the average female super balance at retirement is significantly lower than males. We covered this in detail in Episode 17 of the Wealthlab Podcast: “Retirement Age Revealed: The TRUTH for Women”.
Investment option. The returns inside your fund depend on which investment option you’re in. Many Australians are in a default “balanced” option without realising it may actually be closer to a growth allocation. As Phil noted on the podcast, what a fund calls “balanced” is often a growth portfolio in disguise. Reviewing your investment option is one of the highest-impact things you can do.
Fees. Even a 0.5% difference in annual fees compounds significantly over a working life. A $50,000 balance paying 1.5% in fees vs 1% in fees will be around $30,000 worse off at retirement over 20 years, all else being equal.
How to Check Your Super Is Being Calculated Correctly
You can verify your super contributions in a few ways:
Check your payslip. Super contributions should appear as a separate line item, showing the amount paid to your fund each pay cycle.
Log into myGov and link your ATO account. You can see all your super accounts, your employer’s reported contributions, and any lost or unclaimed super from previous jobs.
Contact your super fund directly. Most funds let you check your contribution history online or via their app.
If you believe your employer is not paying the correct amount, you can report it to the ATO’s super guarantee integrity team. The ATO actively pursues unpaid super on behalf of employees.
Maximising Your Superannuation
Understanding how super is calculated also shows you where the levers are for growing it faster.
Salary sacrifice. Direct part of your pre-tax salary into super on top of the employer contribution, up to the $30,000 concessional cap. This reduces your taxable income and builds your super balance faster.
Catch-up contributions. If your total super balance is below $500,000 and you haven’t used your full concessional cap in previous years, you can carry forward unused amounts going back five years and make a larger contribution in a single year. This is particularly useful after a career break or when you receive a bonus.
Spouse contributions. If your partner has a lower super balance, contributing to their fund can even out your combined retirement savings and may provide a tax offset of up to $540. See our guide on can couples combine super.
Government co-contributions. If you’re a low or middle-income earner who makes personal after-tax contributions, the government may match a portion of those contributions up to $500 per year. Check eligibility through the ATO co-contributions page.
Want to see how your super balance is tracking? The Wealthlab super calculator lets you model your projected balance at retirement based on current contributions, investment returns, and salary. It takes two minutes and gives you a far clearer picture than trying to estimate it mentally.
FAQs: How Superannuation Is Calculated in Australia
What is the current superannuation guarantee rate in Australia for 2025-26?
The current superannuation guarantee rate is 12%, effective from 1 July 2025. This is the final rate under the legislated schedule of increases and will remain at 12% permanently. Source: ATO superannuation guarantee rates.
How is super calculated in Australia?
Super is calculated as 12% of your ordinary time earnings (OTE). Your employer multiplies your OTE by 12% and pays that amount directly into your nominated super fund. For example, if your OTE is $80,000 per year, your employer must contribute $9,600 annually.
What is super calculated on?
Super is calculated on ordinary time earnings, which includes your base salary, most allowances, commissions, and paid leave. It does not include overtime, expense reimbursements, or redundancy payments.
Is the 12% super included in my salary package?
It depends on your contract. Most salaried employees receive super on top of their base salary, meaning a $70,000 salary plus $8,400 in super contributions. However, some contracts are structured as a total remuneration package that includes super within the stated amount. Check your employment contract or ask your payroll team to confirm which applies to you.
What percentage is superannuation in Australia?
The current super percentage in Australia is 12% of ordinary time earnings. This has been the rate since 1 July 2025, rising from 11.5% the previous year. The 12% is the employer’s minimum contribution obligation and is paid on top of your salary for most workers.
How is superannuation calculated when I’m paid fortnightly or weekly?
The calculation is the same regardless of pay frequency. Your annual OTE divided by your pay periods, multiplied by 12%. If you earn $80,000 per year paid fortnightly (26 pay periods), your OTE per fortnight is approximately $3,077, and your super contribution per fortnight is approximately $369. Employers can calculate per payment or per quarter as long as the annual total meets the obligation.
Do I get super on overtime?
No. Overtime is excluded from ordinary time earnings under the Superannuation Guarantee rules, so employers are not required to pay super on overtime hours. You do still receive super on your base wages, paid leave, and most allowances.
How can I check if my super is being calculated correctly?
Log into myGov and link your ATO account to see your reported super contributions. You can also check your payslip, contact your super fund directly, or use the ATO’s online tools. If you believe your employer is underpaying super, report it to the ATO’s super guarantee integrity team.
What is the superannuation contribution rate for 2026 and beyond?
The superannuation contribution rate from 2025-26 onwards is 12%, permanently. There are no further legislated increases planned. From 1 July 2026, Payday Super will change the payment frequency from quarterly to per payday, but the 12% rate itself does not change.
How much super will I have at retirement if I earn $70,000?
At $70,000 in OTE with a 12% employer contribution, that’s $8,400 per year in employer contributions. Over a 30-year working life with a 6% average annual investment return, that alone could grow to roughly $670,000 in today’s dollars. Adding voluntary contributions, salary growth, and investment performance can significantly increase that number. Use the Wealthlab super calculator to model your specific scenario.
Superannuation may seem complicated, but at its core it’s a 12% employer contribution on your ordinary time earnings, invested and compounding over your working life. Understanding how it’s calculated, what it’s calculated on, and where the growth comes from puts you in a far better position to make smart decisions in the years before retirement.
At Wealthlab, we help Australians make the most of their super at every stage of life. Book a free 15-minute consultation to review your super strategy,