Maximum Superannuation Contribution Base

The maximum superannuation contribution base refers to the quarterly wage earned by an employee that the employer is required to pay Mandatory Superannuation Guarantee (SG) payments on.

The Superannuation Guarantee Levy is the compulsory superannuation contribution that is to be paid by employers into the superannuation accounts on behalf their employees.

The maximum superannuation contribution base is assessed on a quarterly basis. It is an employees earnings over three months that determines the maximum contributions that an employer must make. A person’s annual income is not relevant in the calculation.

In saying that, if an employee earns exactly the same salary each week or month for the whole year, then the income in each quarter should be the same amount.

The Superannuation Percentage is increasing from 9.0% to 12% between 30 June 2013 and 1 July 2026, as follows:

 

Maximum Superannuation Contributions Base

 
The SG Superannuation contributions required to be paid are capped, depending on the quarterly salary of the employee.

As SG contributions are made on a quarterly basis, the maximum superannuation contributions base is a quarterly figure.

The Maximum Superannuation Contribution Base is as follows:

The figures above signify the maximum salary that an employer is required to calculate SG obligations on. This is not to say that an employer can’t pay SG on wages above this amount, it’s just that they are generally not required to – unless the employment agreement states otherwise. You should also be able to nominate the account your SG payments are made into using the Superannuation Choice Form.

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Here is a working example to show you how the maximum superannuation contribution base applies.

Let’ assume that, in the 2020-2021 financial year, an employee earns $300,000 p.a. equally over the course of the year ($75,000/quarter). The employer is only required to pay superannuation guarantee payments on $57,090/quarter. Based on the SG rate of 9.5% in 2020-2021 year, this equates to an employer SG obligation of $5,423.55/quarter ($21,694.20 p.a.). As you can see, this only equates to 9.5% on an annual wage of $228,360 ($57,090/quarter).
 

Maximum Superannuation Contribution Base: Unequal Earnings

 
What about if earnings were unequal throughout the year? How is the Maximum Superannuation Contribution Base calculated?

The table below details an example of the application of the Maximum Superannuation Contribution Base in a situation where earning fluctuate throughout the year – for instance, where bonuses or commissions may apply.

The table above should give you a practical guide as to how the Maximum Superannuation Contribution Base is applied when earnings in each quarter fluctuate.

You also need to take into account the Concessional Contribution caps and the level of contributions tax that you pay.