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:
| Period | Superannuation Guarantee Rate (Percentage %) |
|---|---|
| 1 July 2003 – 30 June 2013 | 9% |
| 1 July 2013 – 30 June 2014 | 9.25% |
| 1 July 2014 – 30 June 2015 | 9.5% |
| 1 July 2015 – 30 June 2016 | 9.5% |
| 1 July 2016 – 30 June 2017 | 9.5% |
| 1 July 2017 – 30 June 2018 | 9.5% |
| 1 July 2018 – 30 June 2019 | 9.5% |
| 1 July 2019 – 30 June 2020 | 9.5% |
| 1 July 2020 – 30 June 2021 | 9.5% |
| 1 July 2021 – 30 June 2022 | 10.0% |
| 1 July 2022 – 30 June 2023 | 10.5% |
| 1 July 2023 – 30 June 2024 | 11.0% |
| 1 July 2024 – 30 June 2025 | 11.5% |
| 1 July 2025 – 30 June 2026 | 12.0% |
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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:
| Income Year | Per Quarter |
|---|---|
| 2020-21 | $57 090 |
| 2019-20 | $55 270 |
| 2018-19 | $54 030 |
| 2017-18 | $52 760 |
| 2016-17 | $51 620 |
| 2015-16 | $50 810 |
| 2014-15 | $49 430 |
| 2013-14 | $48 040 |
| 2012-13 | $45 750 |
| 2011-12 | $43 820 |
| 2010-11 | $42 220 |
| 2009-10 | $40 170 |
| 2008-09 | $38 180 |
| 2007-08 | $36 470 |
| 2006-07 | $35 240 |
| 2005-06 | $33 720 |
| 2004-05 | $32 180 |
| 2003-04 | $30 560 |
| 2002-03 | $29 220 |
| 2001-02 | $27 510 |
| 2000-01 | $26 300 |
| 1999-2000 | $25 240 |
| 1998-99 | $24 480 |
| 1997-98 | $23 630 |
| 1996-97 | $22 590 |
| 1995-96 | $21 720 |
| 1994-95 | $20 780 |
| 1993-94 | $20 160 |
| 1992-93 | $20 000 |
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.
| Quarter | Actual Earnings | Maximum SG Contribution Base | SG Rate | SG Payable |
|---|---|---|---|---|
| 1st Quarter | $41 000 | $57 090 | 9.50% | $3 895 |
| 2nd Quarter | $59 000 | $57 090 | 9.50% | $5 423 |
| 3rd Quarter | $58 400 | $57 090 | 9.50% | $5 423 |
| 4th Quarter | $46 000 | $57 090 | 9.50% | $4 370 |
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.
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Is there an option to pay the excess 9.5% contribution guarantee as income taxable cash payment to the employee? In other words, the employee went over $25,000 concessional super cap as of March 2018. Instead of contributing the 9.5% of the income from April to June this year, can the employer arrange to pay that in cash less tax to the employee? What are the option to avoid additional tax for excessive contribution?
Subject to the employment agreement, employers must pay 9.5% of the quarterly superannuation contribution base as shown in the table above into the employees superannuation account in the current financial year. The current maximum contribution base is $52,760 per quarter. Paying 9.5% of this over four quarters should only result in superannuation guarantee (SG) payments of $20,049 for the year ($211,040 x 9.5%). Is it possible that excess SG contributions were made in previous quarters this financial year? Could SG contributions for the remainder of the year be reduced to account for previous excess SG contributions and instead paid as an increased wage? It might be an idea to also refer to any employment agreements in place to see what level of superannuation payments are required. Click here for information on excess concessional contributions tax.
Hi, I have one question. On one side there is the quarterly contribution cap of $5,132.85 which is $20,531.40 a year. But on another side, there is a yearly contribution cap of $25,000.
So what is the difference between 5k vs 25k?
The quarterly maximum contribution base refers to the maximum compulsory super contributions that an employer is required to make into an employee’s account as SG payments, based on the employee’s quarterly salary.
The yearly concessional contribution cap of $25,000 refers to the maximum amount that an individual is able to receive into their account as a concessional contribution. A concessional contribution includes employer SG contributions, salary sacrifice contributions and personal concessional contributions.
The $20,531 limits an employers obligation on the amount of super they need to pay to an employee.
The $25,000 cap limits the amount of low-tax super contributions that one person is able to receive into their account.
Is the maximum contributions base take into account income from all employers or is it per employer? For example where you change jobs during a quarter.
Great question Rex. Legislation surrounding this found here refers to each employer’s responsibility. Therefore, I believe the cap relates to each employer. This may result in exceeding the annual concessional contribution cap.
Related Posts:
Excess Super Contributions Tax Rules
Excess Concessional Contribution Charge
Can you average out the total yearly contribution payments i.e. MSCB SG payments annual equal $20,049 divide that by the number of pay periods in a 12 month period i.e. $20,049 / 26 fortnights = $771.11 per fortnight.
The maximum contribution base applies on a quarterly basis. I do not believe it can be averaged out over the year. Employer SG obligations are determined by earnings in respect of ordinary time earnings, including earnings in respect of ordinary hours worked (but not termination payments) and earnings consisting of over-award payments, shift loading or commission – up to the maximum contribution base.
Hi Chris, I am wondering whether the quarterly SG payment caps are based on the earnings dates (i.e. payslip dates), or the date of payment into an employees bank account?
I would assume it would be based on earnings date, so the employee isn’t impacted by any delays in salary payments?
Thanks for your help.
Good question Dean, my understanding is that it is earnings date
Hi Chris, If an employer pays a bonus which has been based on annual performance throughout the year, the amount of PAYG to be withheld is treated differently because the bonus is over a set timeframe (in this example 12 months). So my question is, why would an annual bonus paid in one quarter be impacted in favour of the employer where they can apply the Max Super Contribution Base? If the employer was to pay the bonus on a quarterly basis, the employee would be better of from a super perspective but from a PAYG perspective it would be no different if it was paid annually or quarterly. I don’t see this as particually fair to the employee in this situation.
Hi Annie, great point! For bonuses paid on annual performance, it would make sense for the payments to be applied across the four quarters for SG purposes. I understand your comparison with the PAYG system, but not sure that it’s directly comparable, as PAYG is simply a provision for tax, not a tax in itself. Therefore, once a tax return is completed, no-one is affected either way. But, I still think you make a fair point for bonus payments. I am keen to look further into this situation.
Hi Chris, if it has come to light that a super contribution was not paid for one month of the year and the impact was that the employee was under the MCB for a quarter but they exceeded the annual contribution base for the year, am I correct in understanding it needs to be paid to the employee as the MCB is calculated on a quarterly basis?
Hi Tanya, my understanding is that there is no annual maximum contribution base. It is only assessed on a quarterly basis.
Hi Chris, our workplace pays above the 9.5% and i want to find out do we calculate the maximum contribution base with the 9.5% SG amount and cap the quartly total amount or do we calculate from our much higher % rate and cap it quartly.
For example
12.5% x $54030 = $6,753.75 to be the quartly Contribution cap
Vs
9.5% x $54030 = $5,132.85
Hi Daniel,
The calculation of the maximum contribution base is legislated here http://www5.austlii.edu.au/au/legis/cth/consol_act/sga1992430/s15.html The calculation of the maximum contribution base is not affected by employment agreements.
Unfortunately I am unable to comment on the amount you are required to pay to your employee, as this will be determined by the employment agreement.
I suggest discussing this with the business’s accountant.
Regards,
Chris