The Superannuation Guarantee (SG) is the minimum percentage of an eligible employee’s ordinary-time earnings that an employer must pay into superannuation. The rate has been progressively increased since compulsory super was introduced in 1992.
SG Rate Schedule — Full History and Projections
| Financial Year | SG Rate |
|---|---|
| 1992–93 | 3% |
| 1993–94 | 3% |
| 1994–95 | 4% |
| 1995–96 | 5% |
| 1996–97 to 1999–2000 | 6% |
| 2000–01 to 2001–02 | 8% |
| 2002–03 | 9% |
| 2003–04 to 2012–13 | 9% |
| 2013–14 | 9.25% |
| 2014–15 | 9.5% |
| 2015–16 to 2020–21 | 9.5% |
| 2021–22 | 10% |
| 2022–23 | 10.5% |
| 2023–24 | 11% |
| 2024–25 | 11.5% |
| 2025–26 onwards | 12% |
The SG rate reached 12% from 1 July 2025 — the final step in the legislated schedule. There are no further automatic increases legislated beyond 12%.
Why the SG Rate Has Been Increasing
The gradual increase from 9.5% to 12% was a policy decision of the Labor Government (originally scheduled in 2010, paused under the Coalition Government from 2014 to 2021, then resumed with incremental 0.5%/year increases from 2021). The rationale:
- Australia’s retirement savings rate has historically been considered too low relative to life expectancy
- The ASFA Comfortable Retirement Standard requires a balance ($595,000+) that most Australians wouldn’t reach on 9.5% SG alone
- Higher SG helps reduce dependence on the Age Pension
What the SG Rate Applies To
The SG rate applies to ordinary-time earnings (OTE) — broadly, the earnings employees receive for their ordinary hours of work. This includes:
- Base salary
- Casual loadings
- Commissions (if for ordinary hours)
- Allowances for ordinary hours
- Some bonuses (if paid regularly for ordinary hours)
It excludes overtime pay (see Super on Overtime).
SG Rate and the Maximum Super Contribution Base
Employers are only required to pay SG on earnings up to the Maximum Super Contribution Base (MSCB). For FY2024–25, the MSCB is $62,270 per quarter ($249,080/year). Earnings above this threshold do not attract a mandatory SG contribution.
Example:
- Employee earns $300,000/year
- Employer must pay SG on up to $249,080 only
- Mandatory SG (at 11.5%): $249,080 × 11.5% = $28,644/year
- Employer is not required to pay SG on the remaining $50,920 of salary
High-income earners can still negotiate voluntary super contributions above the SG on the excess salary, or make additional contributions personally.
SG Rate for Salary Sacrifice
When an employee salary sacrifices into super, the salary-sacrificed amount reduces ordinary-time earnings for SG calculation purposes in most cases. However, some employers voluntarily maintain SG on the pre-sacrifice salary. Employees should check their employment contract.
Frequently Asked Questions
Is 12% the final SG rate, or will it increase again? 12% is the legislated rate from 1 July 2025. There is no further automatic increase legislated. Any change would require new legislation.
Did the SG rate ever go down? No — the SG rate has never been reduced. The 2013–2021 pause at 9.5% (instead of continuing to rise to 12%) is sometimes confused with a cut, but the rate remained constant at 9.5% during that period.
What if my employer pays more than 12%? Employers can voluntarily pay more than the SG rate. This is not common in standard employment, but some enterprise agreements or executive packages include above-SG super contributions.
For more: Employer Super Obligations, Ordinary Time Earnings Explained, Super Rates Australia. For advice on your super, speak with a licensed financial adviser via MoneySmart.