Paying superannuation for your employees

Published Wednesday 23 September 2026

Table of contents

• What is superannuation and who do you pay it for
• How much super you need to pay
• How to pay your employees’ super in 4 steps
• Payday Super: paying super on payday
• Super due dates
• What happens if you pay super late
• Record-keeping and reporting
• Simplify super payments with Xero
• FAQs on paying superannuation

Key takeaways

• The super guarantee rate is 12% of your employees’ qualifying earnings, unchanged since 1 July 2025.
• Under Payday Super, you generally pay super alongside each pay cycle, and contributions must generally reach the employees’ super fund within 7 business days of payday. Extended timeframes apply in some circumstances
• You pay super through a SuperStream-compliant method, such as a payroll system or clearing house. The ATO’s Small Business Clearing House closed on 1 July 2026.
• If a contribution isn’t received within the required timeframe, you may be liable for the super guarantee charge, which can include notional interest and an administrative uplift on top of the unpaid super.

What is superannuation and who do you pay it for

Superannuation, or super, is Australia’s compulsory retirement savings system. As an employer, you pay a percentage of each eligible employee’s earnings into their nominated super fund.

According to Xero Small Business Insights, small business jobs grew 3.0% year-on-year in the June quarter of 2026, so more employers are taking on staff and managing super.

Getting super right keeps you compliant with the Australian Taxation Office (ATO) rules that govern it. Knowing your superannuation compliance obligations is the first step.

Which workers are eligible for super

Super is one part of paying your employees correctly, so start by checking who qualifies. You pay super for employees aged 18 and over, whether they work full-time, part-time or casually, and there’s no minimum earnings threshold.

Employees under 18 qualify only when they work more than 30 hours in a week. Some contractors also qualify if you pay them mainly for their labour, even when they have an ABN.

If you’re unsure how to classify someone, compare the difference between an independent contractor and employee. The ATO's super guarantee eligibility tool can confirm who you need to pay, and the Fair Work Ombudsman covers the tax and super basics.

The super guarantee rate

The super guarantee rate is 12% of qualifying earnings, and it’s been at that level since 1 July 2025, up from 11.5%. For earnings paid from 1 July 2026, super is calculated on your employee’s qualifying earnings. Qualifying earnings use ordinary time earnings (OTE) as their base and include some additional categories, such as commissions and qualifying salary sacrifice amounts.

For many employers, qualifying earnings closely mirror the old ordinary time earnings figure, but it's important that payroll is set up correctly so the right payments are included. You can track how the rate reached 12% in our guide to recent super guarantee changes.

How much super you need to pay

Work out super by applying the 12% rate to each employee’s qualifying earnings. That figure covers base salary, paid leave, allowances tied to ordinary hours and shift loadings.

Take an employee on $65,000 a year. Their super is $65,000 × 12% = $7,800 a year, spread across their pay periods. The ATO’s guide to how much super to pay breaks down what to include.

Calculating super on overtime, bonuses and leave

In most cases, overtime that is clearly identified and paid at overtime rates isn’t included in qualifying earnings, so super isn’t calculated on those amounts.

Bonuses and commissions tied to ordinary hours usually count, as does leave loading in many cases. Termination lump sums may or may not attract super, depending on the type of payment.

Check the relevant award, agreement or ATO guidance if you’re unsure how a payment should be classified.

How to pay your employees’ super in 4 steps

Paying super comes down to a repeatable routine. Set it up once and each pay run follows the same 4 steps, and a good small business payroll system handles most of it for you.

1. Set up a default super fund and offer employee choice

Choose a default fund with a MySuper product for employees who don’t nominate their own. Give new starters a standard choice form within 28 days so they can choose their own super fund. Our hiring employees checklist covers what else to set up.

2. Check for stapled super funds

If an employee doesn’t choose a fund, request their stapled super fund details through ATO Online services. A stapled fund follows the employee from job to job, so paying into it avoids creating extra accounts.

3. Collect fund details and calculate super

Gather each employee’s tax file number, fund ABN, unique superannuation identifier (USI) and member number. Online payroll software can store these details and calculate the 12% automatically each pay run.

4. Make payments through SuperStream

SuperStream is the ATO’s standard for sending super data and payments electronically. You can meet it with payroll software that supports SuperStream or a commercial clearing house.

The ATO’s Small Business Superannuation Clearing House closed on 1 July 2026. Employers now pay through a SuperStream-compliant payroll system or a clearing-house service.

Payday Super: paying super on payday

Payday Super is now in force. From 1 July 2026, you pay super alongside each pay cycle, rather than in quarterly batches.

Under the rule, the contribution must generally be received by each employee’s fund within 7 business days of payday unless an extended timeframe applies. When paying into an employee’s super fund for the first time, most commonly for a new employee or when an employee changes funds, employers will generally have up to 20 business days.

The rules apply to employers with Superannuation Guarantee obligations, regardless of business size.

Because the ATO’s clearing house has closed, you pay through a SuperStream-compliant method. This payday timing replaced the old quarterly system that many employers used for years.

You can read the ATO’s guidance on Payday Super and see how Xero supports the change on the Xero Payday Super initiative page. It’s worth reviewing your payroll processes so the new timing works and building super into your broader payroll compliance routine.

Super due dates

Super is due every payday, and the contribution must generally reach your employee’s fund within 7 business days of paying their wages. These super due dates apply to every employer, whatever your size.

If you’ve been asking when is super due under the new system, the payday rule sets the timing, and the ATO’s payment deadlines for Payday Super page has the detail. The old quarterly superannuation due dates now only cover earnings paid up to 30 June 2026.

Here’s how the timing works in practice:

• Contributions must generally reach the employee’s fund within 7 business days after payday.
• The ATO considers a contribution on time once the fund has received both the money and the information needed to allocate it.
• A business day excludes weekends and public holidays.
• Legacy quarterly due dates for earnings paid up to 30 June 2026 were 28 October, 28 January, 28 April and 28 July. These now only matter for reconciling super on earnings paid up to 30 June 2026.

To keep the timing handy, you can download our super due dates checklist and share it with whoever runs your payroll.

What happens if you pay super late

If super isn't received by your employee’s fund within the required timeframe, you may need to correct the payment and could face extra charges from the ATO.

These charges are known as the super guarantee charge (SGC) and can include the unpaid super, notional earnings, an administrative uplift and, in some circumstances, a choice loading.

If you identify a late or unpaid contribution, act quickly to correct it. You can also make a voluntary disclosure to the ATO, which can reduce your final super guarantee charge. The ATO has published guidance outlining a practical, risk-based approach to compliance during the first year of Payday Super, with employers who make genuine efforts to meet their obligations and resolve issues quickly considered lower risk.

For paydays from 1 July 2026, the super guarantee charge is tax deductible. General interest charge on an unpaid SGC assessment and late-payment penalties remain non-deductible. Late-payment penalties are generally 25% of the unpaid amount, rising to 50% for repeat late payment within 24 months.

Record-keeping and reporting

Good records prove you’ve paid the right super on time. You must keep your super records for at least five years, in line with ATO record-keeping requirements for employers.

Keep records that show:

• how much super you paid for each employee
• when contributions were made
• the super fund details you used
• your employees’ choice-of-fund information
• any stapled fund details you relied on

You also report super and wages to the ATO through Single Touch Payroll (STP) each pay run. See how Single Touch Payroll works for the reporting detail.

Simplify super payments with Xero

Xero payroll takes the manual work out of managing super. It calculates super on qualifying earnings and lets you manage contributions through auto super using SuperStream, all within your existing payroll workflow.

Auto super is designed to help you meet Payday Super timelines, with contributions typically paid to funds within 4 business days.

You can also report pay information through Single Touch Payroll, helping you manage payroll, super and reporting in one place.

See how Xero handles payroll and super. New to Xero? You can get one month free.

FAQs on paying superannuation

Here are quick answers to common questions about paying super in Australia.

Do I need to pay super for contractors?

You pay super for contractors you engage mainly for their labour, even if they have an ABN.

Super generally doesn’t apply when the contract is with a company, trust or partnership rather than the individual. Check the ATO's guidance if you're unsure whether a contractor is treated as an employee for super purposes.

What is a stapled super fund?

A stapled super fund is an existing fund that follows an employee from job to job. If a new starter doesn’t choose a fund, you request their stapled fund details from the ATO and pay into it.

Is super paid on overtime?

In most cases, overtime that is clearly identified and paid at overtime rates isn't included in qualifying earnings, so super isn't calculated on those amounts.

If an employee’s ordinary and overtime hours aren't clearly separated in their award, agreement or contract, the ATO may treat all hours as ordinary hours. In that case, super may be calculated on all those earnings.

Check the relevant award, agreement or ATO guidance if you're unsure.

What is Payday Super?

Payday Super came into effect on 1 July 2026. Employers now generally need to pay Superannuation Guarantee contributions alongside each pay cycle, rather than quarterly.

Super contributions must generally be received by the employee’s super fund within 7 business days of payday, unless an extended timeframe applies.

Can I claim tax deductions on super payments?

You can claim a deduction for super guarantee contributions paid on time to a complying fund, and for paydays from 1 July 2026 all components of the super guarantee charge are deductible too. The general interest charge and late-payment penalties on an unpaid SGC are not.

What happens if I miss a super payment deadline?

If super isn't received by the employee’s fund within the required timeframe, you may become liable for the super guarantee charge.

The charge can include the unpaid super amount, notional earnings, an administrative uplift and, in some circumstances, a choice loading.

If you spot a late payment, act quickly to correct it. You can also make a voluntary disclosure to the ATO, and may wish to speak with your tax or BAS agent about any further steps required.