Super Calculation on Salary: How It Works in Australia

Super Calculation on Salary: A Simple Guide

When you see a salary figure, it's important to know how superannuation fits in. The super calculation on salary determines how much extra your employer must pay into your super fund. In Australia, this is not a deduction from your pay – it's an additional contribution on top of your gross salary.

The Super Guarantee Rate

From 1 July 2026, the super guarantee is 12% of an employee's ordinary time earnings (or qualifying earnings under the new Payday Super rules). This rate applies to most employees aged 18 and over, and to those under 18 who work more than 30 hours per week. The rate is set by the Australian Taxation Office and is legislated to remain at 12% from 2026-27 onwards.

What Earnings Are Included?

Super is calculated on your ordinary time earnings – the amount you earn for your ordinary hours of work, including commissions, allowances, and shift loadings. Overtime is generally not included. For salary sacrifice arrangements, the base for super calculation may be reduced, but the ATO requires employers to use the Average Weekly Ordinary Time Earnings (AWOTE) rates to update the salary for super purposes. For example, if you salary sacrifice part of your salary into a car or additional super, your employer must still pay the guarantee on an amount that reflects your original ordinary time earnings, not the sacrificed amount.

Maximum Contribution Base

There is a cap on the earnings that attract the super guarantee. For the 2026-27 financial year, the maximum contribution base is $270,830 per year. If your annual earnings exceed this, your employer does not have to pay super on the excess. For example, if you earn $300,000, super is only required on the first $270,830 – that's $32,499.60 in super contributions (12% of $270,830).

Payday Super: New Rules from 1 July 2026

Previously, employers could pay super quarterly. From 1 July 2026, they must pay each payday. The calculation is still 12% of that pay period's qualifying earnings, but the payment must reach your super fund within 7 business days. This change aims to reduce unpaid super and help your balance grow sooner. The Fair Work Ombudsman explains that the National Employment Standards now align with the super guarantee, so if your employer complies with the super laws, they meet their NES obligations.

How Super Affects Your Salary Index

The Salary Index measures gross ordinary-time earnings before super. An index of 100 equals full-time adult ordinary-time earnings of $108,352 per year (based on ABS Average Weekly Earnings, May 2026). Super is not included in that figure. So if your salary is $80,000, your index is about 73.8. Your employer would also pay $9,600 in super (12% of $80,000), but that extra amount is not reflected in the index. The index is a tool to compare base pay across jobs, industries, and states.

Examples of Super Calculation on Salary

• Full-time employee earning $70,000: Super = $8,400 per year (12% of $70,000). Total cost to employer = $78,400.
• Employee earning $250,000: Super is only on the first $270,830, so $250,000 is below the cap. Super = $30,000 (12% of $250,000).
• Casual employee earning $33.05 per hour (including casual loading): If they work 38 hours per week, weekly earnings = $1,255.90. Super = $150.71 per week (12% of $1,255.90). Note: the casual loading is part of ordinary time earnings for super purposes.

Awards and Extra Super Terms

Some modern awards and enterprise agreements have extra super terms that require higher contributions than the 12% guarantee. Always check your award or agreement. The pay guides on Salary Index can help you find the correct minimum rates for your classification.

Tax and Super

Super contributions are taxed at 15% when they enter your fund (up to the concessional contributions cap). Your salary is taxed at your marginal rate plus the 2% Medicare levy. For 2026-27, resident tax rates are: nil up to $18,200; 15% from $18,201 to $45,000; 30% to $135,000; 37% to $190,000; 45% above. The super guarantee is not deducted from your take-home pay – it's an employer cost.

Key Takeaways

• Super is 12% of your ordinary time earnings (from 1 July 2026).
• The maximum contribution base is $270,830 for 2026-27.
• Payday super means contributions are paid each payday.
• Super is separate from your salary index figure.
• Check your award for any extra super obligations.

For more on how pay compares across Australia, see the states and industries pages. If you're unsure about your award classification, use the topics section to find relevant guides.