Super Guarantee Hits 12% — and Payday Super Starts July 2026
- Published
- February 2026
- Last reviewed
- Tax-year context
- Current
- Reading time
- 9 min
General information only — we maintain pages with primary-source checks and date-based reviews. See editorial policy.
General information only. This is not tax or financial advice. Consult a registered tax agent for advice specific to your situation.
Two major superannuation changes converged around the 2025-26 to 2026-27 transition: the super guarantee (SG) rate reached its long-planned destination of 12% on 1 July 2025, and since 1 July 2026, employers must pay super contributions on payday instead of quarterly.
Together, these changes increased both the amount employers pay and the frequency with which they pay it. If you’re an employer and your systems still assume quarterly super, the time to fix that is now.
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 qualifying 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 |
For pay from 1 July 2026, SG is calculated on qualifying earnings, which replaced ordinary time earnings (OTE) as the SG base when Payday Super started. Quarters ending on or before 30 June 2026 were calculated on OTE.
Qualifying earnings is OTE plus three additions: all commissions (including commissions for work performed entirely outside ordinary hours), amounts salary sacrificed to super that would otherwise have been qualifying earnings, and certain payments to people covered by the expanded definition of employee. What counts as OTE has not changed — it still covers base salary, shift loadings, paid leave and some allowances, and still excludes overtime, which is not qualifying earnings either. A bonus for work performed entirely outside ordinary hours is also excluded, even though a commission on that work is now included. For a precise definition, check the ATO’s guidance on what payments are qualifying earnings.
The maximum super contribution base for 2025-26 is $62,500 per quarter ($250,000 per year), down from $65,070/qtr in 2024-25 per ATO AWOTE re-indexation. Employers are not required to pay SG on earnings above this cap, though they can choose to.
The maximum contribution base stopped being quarterly on 1 July 2026. Under payday super it is now a single annual figure for the whole financial year — $270,830 for 2026-27. The ATO sets it with a formula rather than by AWOTE indexation: concessional contributions cap × 100 ÷ SG charge percentage, rounded down to the nearest $10. Once your payments to an employee reach that amount in a financial year, you can stop paying the minimum SG for that employee for the rest of the year. The $62,500 quarterly figure above applies only to quarters ending on or before 30 June 2026 — do not carry it forward as a quarterly cap into 2026-27, because there is no longer a quarterly cap to carry.
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 that started 1 July 2026
Until 30 June 2026, employers had to pay SG contributions quarterly, by the 28th day after each quarter ended. This meant super could be paid up to 4 months after it was earned.
Since 1 July 2026, employers must pay super contributions within 7 business days of each payday — aligning super payments with salary payments.
What changed
| Old rules (to 30 June 2026) | Current rules (from 1 July 2026) |
|---|---|
| Pay quarterly (by 28th of month after quarter) | Pay with each payroll run, received by the fund within 7 business days |
| Up to 4 months between earning and payment | Super paid within days of earning |
| Late payment triggered SGC assessed quarterly | Late payment triggers SGC assessed per payday (QE day) |
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 see super contributions hitting their fund within days of each pay, making it immediately visible if an employer falls behind.
The current super guarantee charge
Under the old quarterly system, missing the deadline meant paying the super guarantee charge (SGC) — the missed super plus interest and an admin fee, assessed quarterly and not tax-deductible.
Since 1 July 2026, the SGC is assessed by the ATO separately for each payday (each “QE day”):
- The individual super guarantee shortfall for that payday — super not received by the fund within 7 business days (20 for a new employee or fund’s first contribution)
- Notional earnings — interest on the shortfall, accruing daily at the general interest charge rate
- An administrative uplift starting at 60% of the shortfall plus notional earnings combined, reducible for a first miss or a voluntary disclosure (potentially to nil)
- A choice-of-fund loading of 25% of the contribution if choice-of-fund rules were also breached
- For paydays from 1 July 2026, the SGC — including the uplift — is tax-deductible, unlike under the old regime
- Employers no longer lodge a quarterly SGC statement; the ATO assesses missed payments directly from Single Touch Payroll and super fund data, or an employer can self-report first with a voluntary disclosure statement
- Directors may still face personal liability for unpaid super under existing director penalty provisions
What employers should do
1. Confirm your payroll provider is ready
Payroll software needs to process super contributions with every pay run, not batch them quarterly. Most major providers (Xero, MYOB, QuickBooks) have updated their systems for payday super — confirm your setup is actually generating a per-payday super instruction, not just capable of it.
2. Manage the cash flow shift
Quarterly super payments let businesses hold cash for up to 4 months. Payday super removed that buffer. For a business with 10 employees averaging $80,000 salary:
| Payment frequency | Cash flow impact |
|---|---|
| Quarterly (old system) | $24,000 every 3 months |
| Fortnightly (payday super) | ~$3,692 every 2 weeks |
The total annual cost is the same, but the timing changed. Businesses that relied on quarterly timing to manage cash flow needed to adjust.
3. Audit your super compliance
The ATO has real-time visibility into super payments via Single Touch Payroll and fund reporting, so non-compliance is harder to hide than under the old quarterly system. If you have unpaid or late super — including any outstanding shortfall from a quarter before 1 July 2026 — address it:
- Pay arrears directly to employees’ funds as soon as you identify them
- If a payday-super shortfall hasn’t yet been assessed by the ATO, consider lodging a voluntary disclosure statement — it can reduce the administrative uplift, sometimes to nil
- Contact the ATO to arrange a payment plan if you can’t pay a super guarantee charge assessment in full
4. Update employment contracts
Review contracts to ensure super payment terms are consistent with the payday requirements. If your contracts still reference quarterly super, they need updating.
What employees should do
- Check your super fund regularly — 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 |
| 1 Jul 2026 | Payday super started |
| 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
- Since 1 July 2026, employers must pay super with every payroll, not quarterly
- Payroll systems, cash flow planning, and employment contracts needed to be updated for the switch to per-payday super
- The ATO has real-time visibility into super payments, making late payment harder to conceal
- Employees should monitor their super fund for timely contribution arrival after every payday
- 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.