Yes — superannuation is compulsory in Australia for most workers. Employers are legally required to contribute a minimum of 12% of your ordinary time earnings into a super fund on your behalf under the Superannuation Guarantee (SG) legislation. This is not optional for employers, and it does not come out of your take-home pay.
However, not every worker is covered, and not every payment you receive from your employer counts toward the SG calculation. Here’s what you need to know.
Who Super Is Compulsory For
You are entitled to SG contributions from your employer if you:
- Are 18 years or older — regardless of whether you work full-time, part-time, or casually
- Are under 18 and work more than 30 hours in a week in which you earn wages
- Are a contractor paid mainly for your labour (even if you have an ABN, you may still be entitled to SG — see below)
- Are a temporary visa holder working in Australia (most temporary workers are covered)
Importantly, the $450 per month minimum earnings threshold that previously excluded very low-income earners was abolished on 1 July 2022. Your employer must now pay SG contributions regardless of how little you earn in a month.
Who Is Excluded From Compulsory Super
There are some categories of workers who are not entitled to SG contributions:
| Category | SG entitlement |
|---|---|
| Non-resident employees paid for work done outside Australia | Not entitled |
| Foreign executives holding certain visas (covered by bilateral agreements) | May be exempt |
| Some contractors paid mainly for a result (not labour) | Generally not entitled |
| Private or domestic workers (e.g., nanny, cleaner) working less than 30 hrs/week | Not entitled |
| Under-18s working 30 hours or fewer per week | Not entitled |
It is worth noting that most exclusions are narrow — if you are working in Australia and receiving wages for your labour, you are most likely entitled to SG.
Contractors and Super
Being paid as a contractor or having an ABN does not automatically mean you miss out on super. Under the SG rules, if you are engaged as a contractor and the contract is wholly or principally for your labour, your employer (the engaging party) must pay SG on the amounts they pay you.
This catches many workers in industries like construction, IT consulting, and trades where ABN arrangements are common. If you are unsure, the ATO’s SG eligibility tool can help you check your entitlement.
Self-employed people (sole traders or company directors paying themselves) are generally not entitled to employer-paid SG, but they can make voluntary contributions to super themselves.
What Counts as Ordinary Time Earnings (OTE)?
The SG is calculated as 12% of your ordinary time earnings (OTE) — not necessarily your total pay. OTE generally includes:
- Your ordinary hourly rate or salary
- Commissions and allowances paid for ordinary hours of work
- Leave payments (annual leave, sick leave) for ordinary hours
- Overtime loading if it is part of your ordinary pay arrangement
OTE generally excludes overtime pay for hours worked beyond your ordinary hours. This means if you regularly work overtime, your super may be calculated on less than your full take-home pay.
The Current SG Rate
The SG rate is 12% for FY2025–26. This is the legislated final rate — the rate climbed gradually from 9.5% in FY2021–22 to reach 12% this year.
| Financial Year | SG Rate |
|---|---|
| FY2022–23 | 10.5% |
| FY2023–24 | 11% |
| FY2024–25 | 11.5% |
| FY2025–26 | 12% |
When Employers Must Pay
Currently, employers must pay SG contributions to your super fund at least quarterly — by the 28th day after the end of each quarter (28 October, 28 January, 28 April, 28 July).
A major reform — Payday Super — takes effect from 1 July 2026. From that date, employers must pay super on the same day they pay your wages. This eliminates the current quarterly lag and makes it much easier to detect when super is not being paid.
What Happens If Your Employer Doesn’t Pay?
Employers who fail to pay SG contributions on time become liable for the Superannuation Guarantee Charge (SGC), which is more expensive than simply paying the super on time. The SGC includes:
- The unpaid super amount
- Interest on the unpaid amount (currently 10% per year)
- An administration penalty of $20 per employee per quarter
The ATO can also apply penalties of up to 200% of the SGC amount in serious cases, and directors can be held personally liable for unpaid super.
How to Check If Your Super Is Being Paid
- Check your payslip — your employer should show super contributions on your payslip, though the actual payment to the fund may lag by up to a quarter under current rules
- Log into myGov — link your ATO account to see all super contributions reported against your Tax File Number
- Check your super fund account — most fund apps and portals show contribution history
- Contact the ATO — if you believe super is unpaid, you can report it to the ATO via the ATO super enquiry form
The ATO recovers hundreds of millions in unpaid super each year. You will not face any penalty for reporting — the obligation is entirely on your employer.
Can You Opt Out of Super?
Generally, no — you cannot opt out of receiving employer SG contributions. The compulsory nature of the system is by design: it ensures Australians save for retirement even when they might choose to spend that money today.
The only limited exception applies to individuals with a total super balance at or above the Transfer Balance Cap ($2.0 million in FY2025–26) — employers are still technically required to contribute, but such individuals may have complex strategies in place. This is an edge case affecting very few Australians.
You can, however, choose which fund receives your employer contributions. If you do not nominate a fund, your employer must use your most recent “stapled” fund (from a prior job) — or a default fund if no stapled fund exists.
Super Is Compulsory — But Voluntary Contributions Help Too
While the SG floor is compulsory, the 12% alone may not be enough to fund a comfortable retirement. ASFA’s comfortable retirement standard for a single person requires a super balance of approximately $595,000 at retirement (FY2024–25 estimate).
Consider whether salary sacrifice, personal contributions, or government co-contributions can help you build beyond the compulsory minimum. For more, see our Superannuation Guide Australia and How Super Works.
Frequently Asked Questions
Is super compulsory for casual workers? Yes — casual workers over 18 are entitled to SG contributions on all wages earned, regardless of how many hours they work per week. The old $450/month earnings threshold that excluded low-earning casuals was removed on 1 July 2022.
Do I get super if I am self-employed? No — self-employed people (sole traders, partners in a partnership) do not receive employer SG contributions because there is no employer. However, you can make voluntary contributions to a super fund and may be able to claim a tax deduction on concessional contributions.
Does my employer have to pay super on bonuses? Not always. Bonuses paid for performance or as a one-off are generally not OTE, so super is not required on them. However, if a bonus is part of your regular remuneration structure, it may attract SG. Check with your employer or the ATO.
What is the superannuation guarantee charge? The SGC is a penalty payable by employers who fail to pay SG contributions by the due date. It is calculated on a broader base than OTE (total salary and wages) and includes interest — making it more expensive for employers than simply paying on time.
Can my employer pay less than 12%? No — 12% is the legal minimum for FY2025–26. Your employer can pay more (any excess above the SG minimum is still treated as a concessional contribution), but they cannot pay less without incurring the SGC.
Related Guides
- Superannuation Guide Australia (2026)
- How Super Works in Australia
- Employer Super Contributions Explained
- Salary Sacrifice Super Explained
- ATO: Superannuation Guarantee
This article provides general information about compulsory superannuation in Australia. It does not constitute financial or legal advice. For advice tailored to your situation, speak with a licensed financial adviser. You can find one through the ASIC financial advisers register or MoneySmart.