Annual salary and super in Australia, what plus super and inclusive of super mean

You have quoted a candidate $80,000 a year, or a job ad has arrived quoting an "annual salary" of $80,000, and you need to know whether superannuation sits inside that figure or on top of it. There is no default rule that answers that question. Australian law does not say an annual salary automatically includes super, and it does not say it automatically excludes it either. The figure means whatever the employment contract says it means, and the two readings differ by about $9,600 a year in total employment cost on an $80,000 role. This guide sets out the rule, the numbers, and the traps so you can quote a figure that means exactly what you intend.

There is no legal rule that "annual salary" includes super

The obligation to pay superannuation comes from the Superannuation Guarantee (Administration) Act 1992 (Cth) (the SG Act), and it is a standalone employer obligation. Under s 17A of the SG Act, an employer has a superannuation guarantee amount equal to 12% of the qualifying earnings it pays to an eligible employee, whatever the salary is called in the paperwork. The obligation attaches to the earnings actually paid, not to the label on the salary line of the contract.

What the SG Act does not do is prescribe how a salary figure should be expressed. Two conventions are lawful and both are common in Australian workplaces. A "plus super" figure means superannuation is paid on top of the quoted salary. An "inclusive of super" figure means superannuation is carved out of the quoted total, so the cash component is the total less the super contribution. Neither reading wins by default. What matters is that the job ad, the offer email and the contract all use the same wording, because a tribunal asked to interpret a bare "annual salary" figure would infer its meaning from the whole context, including how the employer described the role when it advertised it.

The risk of getting this wrong is real. Miss a superannuation guarantee payment by its due date and you owe the super guarantee charge instead, which is designed to be more expensive than the contribution you should have made.

The figures: plus super, inclusive of super and silent offers

The table below sets out what each form of wording produces for an $80,000 role at the current rate of 12%.

The 12% rate has applied since 1 July 2025 and is the final scheduled increase, so the split in the table is current. The Australian Taxation Office (ATO) publishes the rate and the maximum contribution base on its key super rates page, and the figures above change if the rate ever changes again.

The format you choose also flows into how the role is advertised. Job boards usually let you select "plus super" or "inclusive of super" when you post a role, but that label does not override the contract. Pick one format, and make the offer email and contract match the ad, so there is no version of the story in which the figure means two things.

Worked calculations: two ways to quote the same role

Scenario one: "$80,000 plus super"

Here the $80,000 is the cash salary, and superannuation is an extra 12 cents on every dollar of ordinary pay. The calculation is straightforward:

• $80,000 × 12% = $9,600 in superannuation
• Total employment cost = $80,000 + $9,600 = $89,600

That $89,600 is before other on-costs such as workers compensation premiums and payroll tax, which apply in some states. If you budget in this format, remember the quoted figure is not the full cost of the role.

Scenario two: "$80,000 package, inclusive of super"

Here the $80,000 is the total budget, and the cash salary is what remains after superannuation is set aside. To find the cash component, divide the package by 1.12:

• $80,000 ÷ 1.12 = $71,428.57 cash salary
• Superannuation = $80,000 − $71,428.57 = $8,571.43
• Total = $80,000, as advertised

The formula generalises: when the SG rate is 12%, cash salary equals the total package divided by 1.12. The ATO's guidance on calculating super works through the same arithmetic on weekly and monthly pay.

The same headline number therefore means different things in different mouths. Quote "inclusive of super" when you want a fixed total budget, and "plus super" when you want the advertised figure to be exactly what lands in the employee's bank account. Either way, write the qualifier into the offer and the contract, and check whether your payroll software is treating the figure the same way you have described it.

What the 12% attaches to: ordinary time earnings, qualifying earnings and the cap

The rate is only half the story. The other half is the earnings base it applies to, and that base changed on 1 July 2026.

Up to 30 June 2026, superannuation guarantee was calculated quarterly on ordinary time earnings (OTE), with contributions due by 28 October, 28 January, 28 April and 28 July. From 1 July 2026, under the ATO's Payday Super reforms, superannuation is calculated on qualifying earnings for each payday and must reach the employee's super fund within seven business days of payday, with limited exceptions such as for new employees.

Ordinary time earnings is defined in s 6 of the SG Act as a person's earnings in respect of ordinary hours of work, plus over-award payments, shift loadings and commissions. The definition expressly excludes lump sum payments of unused annual leave, unused long service leave and unused sick leave made on termination. Qualifying earnings, defined in s 10A, is OTE plus all commissions (including, from 1 July 2026, commissions for work done entirely outside ordinary hours, which is the one genuinely new category), plus salary sacrifice amounts and certain payments to contractors paid mainly for their labour. The ATO's list of payments that are qualifying earnings is the practical reference for what counts.

The SG Act sets a floor, not a ceiling. The ATO is explicit that OTE is a subset of salary and wages and that you may pay super at a higher rate under an award or enterprise agreement, and awards commonly require contributions on amounts that fall outside the statutory base. If you rely on your payroll provider's default settings, check that they capture everything your industrial instrument requires, not just the SG Act minimum.

Two further limits matter. Ordinary hours come from the award or enterprise agreement, and where none applies they are the employee's regular or customary hours, so an employee who is not award-covered may have all of their hours treated as ordinary hours for super purposes. And there is a maximum contribution base: for the 2026-27 financial year it is $270,830 of qualifying earnings, and no minimum superannuation guarantee is required above that cap. In 2025-26, when contributions were still quarterly, the cap was $62,500 per quarter.

Edge cases where the standard calculation does not apply

Several common arrangements change how the standard calculation works:

• Casual employees: Casual loading is OTE and qualifying earnings, so super applies to the loaded rate, not just the base hourly rate. If your payroll system splits casual pay into components, make sure the loading is included in the super calculation.
• Bonuses and commissions: All commissions count as qualifying earnings from 1 July 2026, even commissions earned entirely outside ordinary hours. Performance bonuses linked to ordinary hours generally form part of OTE as well. Whether a discretionary or one-off bonus attracts super depends on its character, so describe the payment accurately in payroll rather than assuming it is either automatically in or out.
• Overtime: Genuine overtime worked outside ordinary hours is not OTE, so no super is required on it. But the line depends on how the award or agreement defines ordinary hours, and shift penalties and loadings are OTE even though overtime payments are not.
• Termination payments: The s 6 definition excludes lump sums for unused annual leave, long service leave and sick leave paid on termination, and genuine redundancy payments generally do not attract super. Payment in lieu of notice is more contentious and turns on the character of the payment, so take advice before treating it either way.
• Awards and enterprise agreements: An award or agreement can require super on amounts that are not OTE and can set a higher contribution rate than 12%. Award annualised salary arrangements generally require a periodic reconciliation to confirm the employee is not worse off, and an enterprise agreement must pass the better off overall test. The cash component of any inclusive salary must still meet the award or agreement minimum rates.
• Salary sacrifice: If an employee sacrifices part of their pay into super, your superannuation guarantee bill does not shrink. The sacrificed amount still counts as qualifying earnings, so super is calculated on the pre-sacrifice figure.
• High earners: Once an employee's qualifying earnings pass the maximum contribution base for the year, the minimum superannuation guarantee obligation stops for that employee for the rest of the year.

When a lawyer should confirm the figure

For a straightforward full-time role with a clean contract, the arithmetic above is all you need. Professional help earns its keep at the edges. A lawyer can confirm whether a role is award-covered and what the award says about ordinary hours, classifications and super, which is what determines the earnings base. A lawyer can also draft the remuneration clause so that "plus super" or "inclusive of super" means the same thing in the ad, the offer and the contract, and can prepare a signed variation if you want to move an existing team from one basis to the other, because you cannot change that unilaterally mid-employment.

If you have missed a superannuation guarantee deadline, a lawyer can help you work through super guarantee charge exposure. Since 1 July 2026 the charge is assessed by the ATO, attracts interest that compounds daily at the general interest charge rate, and includes an administrative uplift, though the uplift can be reduced if you lodge a voluntary disclosure before the ATO acts. Getting that assessment right, rather than leaving it to the ATO's data matching, is where advice pays for itself.

The qualifier after the dollar figure is what decides the number

If one thing is most likely to make you quote the wrong number, it is the missing qualifier. "$80,000" on its own is not a term of art with a fixed legal meaning; it is a blank that a tribunal would fill in from context, and context is exactly where payroll disputes come from. Decide whether your figure is "plus super" or "inclusive of super" before you advertise it, and write that qualifier into every document so the number cannot mean two things.

The rule itself is simple to state. Superannuation guarantee is 12% of qualifying earnings, paid within seven business days of each payday since 1 July 2026 and capped at the annual maximum contribution base. Qualifying earnings covers ordinary hours plus certain loadings and commissions, but not genuine overtime. The wording of your offer decides whether super sits inside or on top of the quoted figure, and consistent wording across the ad, the offer and the contract is what keeps the number honest.