What is Superannuation Guarantee?

Superannuation Guarantee (SG) is the super an employer has to pay on behalf of an employee, on top of their wages. It is not optional, it is not part of the wage, and the rules for paying it changed materially on 1 July 2026.

The rate is 12%

SG is 12% of qualifying earnings. That is the final step of the legislated increases – the rate rose every year from 9.5% to 12% on 1 July 2025, and no further rise is legislated.

If you are reading an older article that says 10.5% or 11%, it is describing a year that has passed.

Who you pay it for

• All employees, whether casual, part-time or full-time
• Directors, on their director fees
• Contractors paid wholly or principally for their labour – the contract, not the ABN, decides this, and it catches more people than employers expect

You do not pay SG for yourself if you are a sole trader or a partner in a partnership. You can contribute to your own super, but that is a personal contribution, not SG.

Since 1 July 2026: super is paid on payday

This is the change that catches businesses out. Super used to be quarterly, due 28 days after the end of each quarter. Those four dates are gone.

Under payday super, every time you pay qualifying earnings, the super on them must be received by the employee's fund within seven business days.

Two details do most of the damage:

• Received, not sent. The clock stops when the fund has the money and can allocate it – not when your payroll run finishes, and not when the clearing house debits you. Build the lag into your process rather than paying on day six.
• Wrong member details mean it was never received. A stale fund number or a mismatched name bounces the contribution back, and the deadline keeps running while it does.

What counts as qualifying earnings

Qualifying earnings (QE) replaced ordinary time earnings as the base. It broadly follows the old rules, but it is wider – it picks up commissions, amounts sacrificed into super, and payments to contractors who are treated as employees for super purposes.

If your payroll software was configured against the old OTE definition and nobody has revisited it, that is the first thing to check.

What it costs to be late

Miss the seven days, even by a day, and the shortfall becomes the SG charge, which is built from:

• the unpaid super itself
• notional earnings, accruing daily from the payday you missed
• an administrative uplift of 60% of those two combined
• a choice loading of up to 25% where the choice-of-fund rules were not followed

If it is still unpaid 28 days after the ATO assesses it, a further penalty of 25% applies – 50% if you have been liable for the charge in the previous two years.

Unlike the old superannuation guarantee charge, the charge itself is deductible. The penalties are not, and the arithmetic above means being late is far more expensive than any cash flow it buys you.

The ATO has said how it will approach the first year in PCG 2026/1: a risk-based approach through to 30 June 2027, with leniency for employers who are trying to comply and fix errors promptly. That is a transition concession, not a grace period, and it ends.

Paying it

The ATO's Small Business Superannuation Clearing House has closed. You need a SuperStream-compliant clearing house or a payroll product that pays super directly – and, given the seven-day rule, one that tells you when the fund actually received the money rather than when you submitted it.

Our payday super checklist walks through what to check in your own setup, step by step.

Where we fit

BTMH looks after Superannuation Guarantee for our payroll clients – calculating it, paying it on time under the new rules, and sorting out the ones that bounce. If you are not certain your current process meets the seven-day deadline, that is worth finding out before the ATO does.

Contact us to discuss your payroll or get a quote.