Australia’s gender pay gap — the difference between average earnings of men and women — has a direct and compounding impact on superannuation. Because the Super Guarantee is a percentage of earnings, every pay gap dollar means a smaller super contribution — and that smaller contribution fails to compound over decades.
Australia’s Gender Pay Gap
According to the Workplace Gender Equality Agency (WGEA):
- The total remuneration gender pay gap is approximately 22% (all employees)
- The base salary gender pay gap is approximately 14%
- Women’s average total remuneration: ~$91,000/year
- Men’s average total remuneration: ~$118,000/year
- Gap: ~$27,000/year
This gap arises from a combination of factors: occupational segregation, part-time work, promotion barriers, and the “motherhood penalty.”
How the Pay Gap Flows Into Super
The SG is 11.5% of ordinary time earnings in FY2024–25. A pay gap translates dollar-for-dollar (multiplied) into a super contribution gap:
| Annual salary | SG (11.5%) | Super per year |
|---|---|---|
| $118,000 (man, average) | 11.5% | $13,570 |
| $91,000 (woman, average) | 11.5% | $10,465 |
| Annual super gap | $3,105 |
The Compounding Effect Over a Career
The contribution gap is only part of the story — the investment compounding on the missing contributions is the larger issue:
Over a 30-year career (contributions starting at age 30):
- Annual super gap: $3,105
- Annual compounding (assumption: 7% average return)
- Total shortfall due to pay gap alone by age 60: ~$290,000
Even if the pay gap were halved to 11%, the super shortfall by retirement would still exceed $145,000.
Industry and Occupation Pay Gaps
The pay gap varies by industry and occupation:
| Industry (WGEA data) | Pay gap (approx.) |
|---|---|
| Finance and insurance | 24% |
| Professional services | 19% |
| Healthcare | 16% |
| Education and training | 11% |
| Retail trade | 11% |
Industries with higher pay gaps generate larger super shortfalls for women within those sectors.
Why the Pay Gap Persists
- Occupational segregation: Female-dominated occupations (care, education, admin) are paid less than male-dominated occupations of comparable skill
- Part-time penalty: Women more often work part-time (often involuntarily due to caring responsibilities), which typically precludes access to senior roles
- Negotiation gap: Research shows women are less likely to negotiate salary, and less rewarded when they do
- Promotion barriers: Women face slower career progression in many industries
Policy Actions
Mandatory gender pay gap reporting: From February 2024, WGEA began publicly publishing employer-level gender pay gap data for organisations with 100+ employees. This transparency is expected to accelerate pay gap closure.
SG on parental leave: From 1 July 2025, the government Parental Leave Pay scheme will include SG — partly addressing the career break contribution gap.
For more: The Gender Super Gap, Boost Super as a Woman, Super and Motherhood. For advice on your retirement planning, speak with a licensed financial adviser via MoneySmart.