Figuring out exactly what a salary includes can feel like cracking a code, especially when it comes to superannuation in Australia. If you’ve ever asked “does salary include super?” or “is super on top of salary?”, you’re not alone - these are common questions for growing businesses.
Getting this right matters. Clear and compliant pay practices help you meet your legal obligations, manage payroll confidently, and set fair expectations with your team. In this guide, we’ll explain how super fits with base salary and salary packages, how to calculate it correctly, who’s entitled to super, and how to communicate pay in a way that’s both transparent and compliant.
By the end, you’ll feel confident about where superannuation sits in your offers, contracts, and pays, and what to do to stay on top of your responsibilities as an employer.
What Is Superannuation And How It Fits With Salary?
Superannuation - or “super” - is Australia’s retirement savings system. Employers must contribute at least the Superannuation Guarantee (SG) percentage of an eligible worker’s ordinary time earnings (OTE) into their nominated super fund.
Super is separate from an employee’s take-home pay. However, the way you describe remuneration in job ads, offers and contracts - whether “including super” or “plus super” - determines whether the super component is carved out of the total figure or added on top.
Because super is calculated on OTE, it’s helpful to understand what counts as ordinary time earnings. If you’re unsure, our plain-English overview of ordinary time earnings is a good place to start.
Does A Salary In Australia Include Superannuation?
It depends on how the salary is described. The wording in your job ad, offer letter and Employment Contract is what counts.
- “Including super” (inclusive): The total figure covers both wages and the compulsory employer super contributions. The employee’s cash salary is the total amount minus the super component.
- “Plus super” (exclusive): The stated salary is the employee’s cash wages, and super is paid on top. Your total cost for that employee will be higher than the stated salary.
For example, “$80,000 including super” means the $80,000 is the overall package (wages + super). “$80,000 plus super” means super is an additional cost calculated on top of $80,000.
Clarity is everything here. Be consistent across your job ad, offer and contract so there’s no confusion about what the numbers represent.
Base Salary Vs Salary Package: What’s The Difference?
These terms are often used interchangeably in day-to-day conversations, but they mean different things.
- Base salary: The employee’s ordinary wages before superannuation, allowances, bonuses or other benefits. If you say “$70,000 base salary plus super”, you’ll pay $70,000 in wages and add the SG contribution separately.
- Total remuneration (or salary package): A single figure that typically includes base salary, compulsory employer super and may include other agreed benefits (for example, allowances or a car benefit). If you say “$80,000 package including super”, the base salary is less than $80,000 once you carve out super.
If you use total remuneration figures, it’s good practice to state the breakdown in writing - base salary amount, the percentage and estimate of employer super, and any other benefits - so your team can see exactly how their package is structured.
How To Calculate Superannuation (With Inclusive And Plus Super Examples)
Employers must pay at least the legislated SG rate on a worker’s OTE. As at 1 July 2024, the SG rate is 11.5%. The rate can change, so always check current ATO guidance before finalising your payroll settings.
If the salary is “including super” (inclusive)
When a package is inclusive of super, you need to carve the super out of the total to find the base salary. The formula is:
Base salary = Total package ÷ (1 + SG rate)
Example: Total package is $82,090 including super at 11.5%.
- Base salary = $82,090 ÷ 1.115 = $73,667.13 (rounded to the nearest cent)
- Super = 11.5% × $73,667.13 = $8,423.71
- Total = $73,667.13 + $8,423.71 = $82,090.84 (minor rounding differences can occur)
Because payroll systems round to cents, you may see a small rounding variance across pay cycles - that’s normal so long as you’re paying at least the minimum super required over time.
If the salary is “plus super” (exclusive)
When super is paid on top, you calculate the SG on the base salary and add it to determine your total cost.
Example: Base salary is $75,000 plus super at 11.5%.
- Super = 11.5% × $75,000 = $8,625.00
- Total package cost ≈ $83,625.00
What about bonuses and commissions?
Super is calculated on OTE, and some bonuses or commissions may form part of OTE depending on how and why they’re paid. For practical guidance, see our overview of superannuation on bonuses and check whether your particular payments count as ordinary time earnings.
Payments that usually don’t attract SG
Some payments - for example, genuine overtime - are generally not OTE. Always check the treatment of a payment type before processing payroll to avoid underpaying or overpaying super. If in doubt, confirm with your payroll adviser or accountant.
Who Gets Super? Employees, Casuals And Some Contractors
Most workers engaged as full-time, part-time or casual employees are entitled to super if they’re over 18 (regardless of hours). Workers under 18 are entitled to SG when they work more than 30 hours in a week.
Contractors can also be entitled to super if they’re engaged primarily for their labour, even if they invoice you with an ABN. If you’re not sure how to classify your workforce, it’s worth getting tailored employee vs contractor advice so your settings are correct from day one.
If your team is covered by a modern award or enterprise agreement, check whether it affects pay components or the base for super. A quick review of your award compliance can help you avoid costly mistakes.
Communicating Pay And Staying Compliant
Clear communication prevents confusion and builds trust. It also helps you comply with Australian law and avoid allegations that pay was represented in a misleading way.
Be explicit in offers and contracts
- Use plain wording like “$75,000 plus super” or “$80,000 including super”.
- State the SG rate and confirm whether it’s on top or included within a total package.
- Where you use a total remuneration figure, set out the components in your Employment Contract so the breakdown is clear.
Avoid misleading statements
Job ads and offers are subject to general laws against misleading or deceptive conduct. Keeping your description of salary and super accurate helps you comply with section 18 of the Australian Consumer Law - see our guide to misleading or deceptive conduct for more context.
Payslips and records
Employers must issue payslips and keep employment records that meet Fair Work requirements. Make sure your payslips and payroll records accurately reflect wages and super, and that contributions are paid by the due dates. It’s also a good idea to show a simple breakdown so employees can see how their package works in practice.
When rates or roles change
SG rates can change over time, and roles can evolve. Review your employment terms periodically, confirm whether your team’s entitlements or OTE definitions have shifted, and update your documents and payroll settings accordingly.
Special cases to watch
- Bonuses/allowances: Check whether a particular payment forms part of OTE before calculating super. Our article on super on bonuses covers the common scenarios.
- Resignations and terminations: Some termination-related payments are treated differently for SG. As a starting point, see how payment in lieu of notice and superannuation interact.
- Salary vs wages language: Be consistent in how you describe remuneration so there’s no ambiguity. If you’re refining your language, this overview of salary vs wages may help.
What Legal Documents Will Help?
Getting your paperwork right keeps payroll smooth and expectations clear. Depending on your setup, consider the following:
- Employment Contract: Confirms whether remuneration is inclusive or plus super, the SG basis, and any allowances or bonuses. A tailored Employment Contract helps prevent disputes.
- Workplace Policies: Supports consistent decisions on matters like leave, performance and benefits, and helps align payroll with company rules.
- Remuneration Letters/Variations: If you adjust packages or promote staff, record changes clearly so payroll and super settings stay aligned.
- Award/Agreement Summaries: If awards apply, a concise summary for managers can reduce errors when calculating pay and super.
Not every business needs all of these documents on day one. The key is that whatever you do use is accurate, consistent and easy to understand.
This guide provides general information to help you navigate salary and super settings in Australia. It isn’t financial or tax advice. Always confirm SG obligations, contribution due dates and any payroll tax interactions with the ATO or your professional adviser, especially if you’re dealing with unusual payment types or complex arrangements.
Key Takeaways
- Whether salary includes super depends on how you describe pay - “including super” is a total package; “plus super” means super is paid on top.
- Base salary is usually the cash component before super; total remuneration or “package” generally includes compulsory employer super and any agreed benefits.
- Calculate inclusive packages by carving out super: Base = Total ÷ (1 + SG rate). For “plus super”, calculate SG on the base and add it on top.
- Most employees (and some contractors engaged mainly for their labour) are entitled to SG on their ordinary time earnings - check your classifications and awards.
- Be upfront and consistent in job ads, offers and contracts, and keep your payslips and records accurate to meet Fair Work and ATO requirements.
- When in doubt - especially with bonuses, allowances or termination payments - confirm whether amounts form part of OTE before calculating super.
If you would like a consultation on managing salaries, superannuation or employment compliance in your business, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.
