Super Guarantee Hits 12% — and Payday Super Starts July 2026
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Two major superannuation changes are converging in 2025-26: the super guarantee (SG) rate has reached its long-planned destination of 12%, and from 1 July 2026, employers must pay super contributions on payday instead of quarterly.
Together, these changes increase both the amount employers pay and the frequency with which they pay it. If you’re an employer, the time to prepare is now — not July.
Super guarantee reaches 12%
On 1 July 2025, the SG rate increased from 11.5% to 12%. This completes the legislated increase schedule that began in 2013:
| Financial year | SG rate |
|---|---|
| 2013-14 | 9.25% |
| 2014-21 | 9.5% |
| 2021-22 | 10% |
| 2022-23 | 10.5% |
| 2023-24 | 11% |
| 2024-25 | 11.5% |
| 2025-26 | 12% |
There is no further increase legislated. The rate is expected to remain at 12% indefinitely.
What 12% means for employers
For every $100,000 in ordinary time earnings, the SG obligation is now $12,000 per employee per year — up from $11,500 last year and $9,500 just five years ago.
| Employee salary | Annual SG (12%) | Quarterly SG |
|---|---|---|
| $60,000 | $7,200 | $1,800 |
| $85,000 | $10,200 | $2,550 |
| $100,000 | $12,000 | $3,000 |
| $150,000 | $18,000 | $4,500 |
SG is calculated on ordinary time earnings (OTE), which includes base salary, commissions, shift loadings, and some allowances — but not overtime. For a precise definition, check the ATO’s OTE guidelines.
The maximum super contribution base for 2025-26 is $65,070 per quarter ($260,280 per year). Employers are not required to pay SG on earnings above this cap, though they can choose to.
What 12% means for employees
More super going in means a larger retirement balance, but it also means slightly less take-home pay if your total remuneration package is fixed. Many employment contracts specify a total package including super — in that case, the higher SG rate comes out of the same total, leaving your cash salary slightly lower.
Example: An employee on a $120,000 total package:
| Component | At 11.5% SG | At 12% SG |
|---|---|---|
| Cash salary | $107,623 | $107,143 |
| Super | $12,377 | $12,857 |
| Total | $120,000 | $120,000 |
The cash salary difference is $480 per year — modest, but it adds up over time. If your contract specifies a base salary plus super, there’s no impact on take-home pay.
Payday super: the big change from July 2026
Currently, employers must pay SG contributions quarterly, by the 28th day after each quarter ends. This means super can be paid up to 4 months after it’s earned.
From 1 July 2026, employers must pay super contributions on or near each payday — aligning super payments with salary payments.
What changes
| Current rules (to 30 June 2026) | New rules (from 1 July 2026) |
|---|---|
| Pay quarterly (by 28th of month after quarter) | Pay with each payroll run |
| Up to 4 months between earning and payment | Super paid within days of earning |
| Late payment triggers SGC quarterly | Late payment triggers new SGC per pay period |
Why the government made this change
The quarterly system has well-documented problems:
- $3.4 billion in unpaid super each year (ATO estimate)
- Employees don’t notice missing contributions until months later
- Employer insolvency wipes out months of unpaid super
- The gap between earning and payment disadvantages employees — especially in a 12% SG environment where the amounts are significant
Payday super means employees will see super contributions hitting their fund within days of each pay, making it immediately visible if an employer falls behind.
The new super guarantee charge
Under the current system, if you miss the quarterly deadline, you pay the super guarantee charge (SGC) — which includes the missed super plus a penalty and interest, calculated quarterly.
From 1 July 2026, the SGC framework changes:
- A notice period begins on payday, giving employers a short window to make the contribution
- If super is not paid within the notice period, the SGC applies per pay period, not quarterly
- The ATO will have real-time data from super funds to detect late payments faster
- Directors may face personal liability for unpaid super under existing director penalty provisions
What employers should do now
1. Talk to your payroll provider
Payroll software will need to process super contributions with every pay run, not batch them quarterly. Most major providers (Xero, MYOB, QuickBooks) are updating their systems, but you should confirm your software will be ready by July 2026.
2. Review cash flow
Quarterly super payments let businesses hold cash for up to 4 months. Payday super eliminates this buffer. For a business with 10 employees averaging $80,000 salary:
| Payment frequency | Cash flow impact |
|---|---|
| Quarterly (current) | $24,000 every 3 months |
| Fortnightly (payday super) | ~$3,692 every 2 weeks |
The total annual cost is the same, but the timing changes. Businesses that relied on quarterly timing to manage cash flow need to adjust.
3. Audit your super compliance now
With the ATO gaining real-time visibility into super payments from July 2026, any existing non-compliance will become harder to hide. If you have unpaid or late super from previous quarters, address it now:
- Lodge any outstanding SGC statements
- Pay arrears directly to employees’ funds where possible
- Contact the ATO to arrange a payment plan if needed
- Consider the ATO’s SG amnesty provisions if applicable
4. Update employment contracts
Review contracts to ensure super payment terms are consistent with the new payday requirements. If your contracts reference quarterly super, they may need updating.
What employees should do
- Check your super fund regularly from July 2026 — you should see contributions appearing within days of each pay
- Compare your pay slip to your super statement — the SG amount on your pay slip should match what arrives in your fund
- Report missing super to the ATO if contributions don’t appear within a reasonable time after payday
- Review your salary packaging — if your contract is “total package including super,” understand that the 12% rate slightly reduces your cash component
Key dates
| Date | Event |
|---|---|
| 1 Jul 2025 | SG rate increased to 12% |
| 28 Jan 2026 | Q2 2025-26 quarterly SG due |
| 28 Apr 2026 | Q3 2025-26 quarterly SG due (last quarterly deadline) |
| 1 Jul 2026 | Payday super begins |
| 28 Jul 2026 | Q4 2025-26 quarterly SG due (final quarterly payment) |
Key takeaways
- The super guarantee rate is now 12% — the final step in the legislated increase schedule
- From 1 July 2026, employers must pay super with every payroll, not quarterly
- Payroll systems, cash flow planning, and employment contracts need to be updated before July 2026
- The ATO will gain real-time visibility into super payments, making late payment harder to conceal
- Employees should monitor their super fund after July 2026 for timely contribution arrival
- The total annual cost doesn’t change — but the payment frequency does
Calculate your tax with the latest super rates
Use the Income Tax Calculator to see how the 12% SG rate affects your take-home pay, or explore salary sacrifice strategies to boost your super further.