Changes to Compulsory Super Guarantee Payments

Business Insights

As part of Australia’s superannuation system, employers are currently providing superannuation guarantee of 9.5% under Superannuation Guarantee (Administration) Act 1992 (Cth).

This is scheduled to increase to 10% from 1 July 2021.

The change is a part of the long-term plan to increase the requirement of superannuation guarantee to 12% from 1 July 2025. The following table provides the changes that are legislated to occur:

Commencement Date

Superannuation Guarantee Rate (%)

1 July 2020


1 July 2021


1 July 2022


1 July 2023


1 July 2024


1 July 2025


What needs to be done

Employers should review the current employment terms in place with their payroll provider.  Please check your accounting software or contact your adviser to check how the changes are to be implemented.Employers may communicate the effects of this on wage & super to employees.

Where Superannuation is added on top of wages

Employers will need to factor in the increased cost on top of the additional superannuation amount paid to the employees over the five years.  

The effect of this change is highlighted in the below table:




Annual Salary



Superannuation Guarantee






Where Salary package is inclusive of super

There will be a fall in employees’ net pay due to the increase in the super guarantee rate.  The following table illustrates the effect of when the superannuation guarantee payments are included in the salary package.




Salary Package
Inclusive of Super



Net Pay



Superannuation Guarantee



The importance of the wording of salary packages

Increase super guarantee to 10%

  • Employers may communicate the effects of this on wage & super to employees.
  • Where remuneration is provided under a superannuation inclusive package, the wage component may be reduced. Clear communication with the employees will avoid queries and misunderstandings.

Final Considerations

The failure to pay correct superannuation payments can result in significant penalties. 

It is important that the business budgets factor in the increased employment costs and that such consideration is clear in the employee contracts.

Obligations not through the Super Guarantee Law should be reviewed.


To speak to an RSM adviser with any questions you have regarding the change, contact your local RSM office today.