How to calculate superannuation
Super is calculated by multiplying your gross salary and wages by 9.5%; this is known as the superannuation guarantee. Super is based on your Ordinary Time Earnings (OTE). Overtime and expenses are excluded but some bonuses and allowances are included. For example if you earn $70,000 and a $4,000 bonus then $74,000 x 9.5% = $7,030. Whilst overtime is excluded from the super calculation if overtime is part of your rostered hours of work so you can’t distinctly identify overtime amounts, the hours actually worked should be included in ordinary hours of work.
The calculator below provides an easy way to do this.
If you earn $57,090 per quarter or more in FY2020/21, you’ll need to check with your employer how much superannuation they are paying into your fund. The maximum super guarantee amount an employer is required to contribute is the equivalent of 9.5% of $57,090 per quarter (equivalent to $228,360 for the year), which works out to be a contribution of $5,423.55 per quarter.
How much superannuation do I pay/get paid?
Employers must pay 9.5% of ordinary time earnings into your super fund. For super guarantee purposes, that is usually 9.5% of the amount you earn from your ordinary hours of work. It includes:
- Shift loadings and allowances
- Some bonuses
Overtime payments however are usually not included.
Your super contributions must be shown on your pay slip. You can also log on to your super fund’s website to see them or wait for your annual statement.
Contractors and the super guarantee
If you’re a contractor paid entirely or principally by one company for your work, then you’re considered an employee for super purposes and, as such, entitled to super guarantee contributions under the same rules as employees.
We assume that the employee is an Australian resident and has provided a tax file number to their employer.
Employees can be full time, part time or casual.
The Super Guarantee is currently set at 9.5% of ordinary time earnings. This rate is set to rise incrementally to 12% by 2025. The SG percentage can be manually increased in the calculator.
If monthly salary (before tax) is $450 or more, employees are generally entitled to SG payments.
Employees under 18 must also work more than 30 hours per week to be eligible for SG payments.
The maximum super contributions base is set at $57,090 per quarter for the 2020-21 financial year. If an employee earns over this amount, the employer is not obligated to make SG contributions for anything above the limit.
This calculator is not intended to be relied upon for the purposes of making a financial decision. You should consider your objectives, financial situation and needs, which are not accounted for in this information, before making any investment or financial decisions.
You are responsible for your own investment decisions and should obtain specific, individual advice from a financial services licensee before making any financial decisions.
Some workplace agreements between employers and employees will provide for higher superannuation contributions than the legal minimum. This might include a higher superannuation percentage rate; the payment of super on overtime or the payment of super regardless of the employee not earning $450 per month.