Is Super Paid on Overtime? What Employers Often Get Wrong
Find out whether superannuation is paid on overtime in Australia. Learn what OTE means, common employer mistakes, and how to check your super is correct.
The short answer: generally no
Under the Superannuation Guarantee (Administration) Act 1992, employers must pay super on an employee's 'ordinary time earnings' (OTE), not on total earnings. Overtime — hours worked beyond an employee's ordinary hours of work — is specifically excluded from OTE. This means if you earn $30/hr base and work 40 hours in a week (with 38 being ordinary and 2 being overtime at time-and-a-half), your employer pays super on the 38 ordinary hours ($1,140) but not on the 2 overtime hours ($90). At the current 12% SG rate, that's $136.80 in super rather than $147.60. The distinction saves employers money but reduces your retirement savings.
What is OTE and what does it include?
Ordinary time earnings (OTE) is the amount an employee earns for their ordinary hours of work. It includes: base salary or wages, shift loadings and penalty rates for ordinary hours (e.g. a regular Saturday shift), commissions, piece rates, bonuses related to ordinary hours work, paid leave (annual leave, personal leave, long service leave), allowances that are part of ordinary earnings (such as a first aid allowance), and casual loading. Importantly, OTE does NOT include: overtime payments, reimbursements of expenses, workers compensation payments, or lump sum termination payments in lieu of notice. The ATO's Superannuation Guarantee Ruling SGR 2009/2 provides the definitive guidance.
The $450 threshold is gone
Before 1 July 2022, employers did not have to pay super if an employee earned less than $450 in a calendar month. This threshold has been completely removed. From 1 July 2022 onwards, super must be paid on all OTE from the first dollar earned, regardless of how little an employee earns in a month. This change particularly benefits casual and part-time workers who may have previously missed out on super contributions during low-earning months. If your employer is still applying the old $450 threshold, they are breaching the law and you should raise this immediately.
Common mistakes employers make with super
The most frequent super errors include: not paying super on shift loadings or penalty rates that form part of ordinary hours (these are OTE), excluding bonuses and commissions from OTE calculations, still applying the abolished $450 monthly threshold, paying super on base salary only when allowances should be included, not paying super on paid leave, and classifying workers as contractors when they are actually employees. The ATO estimates billions of dollars in super goes unpaid each year. These errors can be genuine mistakes, but they have a real impact on your retirement balance over time.
When overtime CAN attract super
There are situations where overtime may attract super contributions. If your enterprise agreement, employment contract, or award specifically states that super is payable on overtime, then the employer must honour that commitment — it overrides the general OTE rule by providing a more generous entitlement. Some salary sacrifice arrangements may also affect the calculation. Additionally, if an employee's 'ordinary hours' include what might otherwise look like overtime (e.g., guaranteed overtime written into an employment contract as part of the regular pattern of work), the ATO may consider those hours to be OTE. The key test is whether the hours are truly 'ordinary' in nature.
How to check if your super is correct
Start by logging into your super fund's website or app and checking that contributions are arriving each quarter (due by the 28th day after the end of each quarter). Compare the amounts to your pay slips — your super should be approximately 12% of your ordinary-hours gross pay. You can also check via your myGov account linked to the ATO, which shows all super contributions reported by employers. The ATO also provides an online 'OTE decision tool' that helps you work out what counts as ordinary time earnings in specific scenarios. If the numbers don't add up, speak to your payroll department first.
What to do if super is wrong
If you believe your employer is underpaying super, start by raising it directly with them — sometimes it's a payroll system error that can be corrected quickly. If the issue isn't resolved, you can report unpaid or underpaid super to the ATO using the 'Report unpaid super' online form. The ATO investigates these reports and has strong enforcement powers. If super is not paid on time, the employer is liable for the Superannuation Guarantee Charge (SGC), which includes the shortfall amount calculated on total salary and wages (not just OTE), interest at 10% per annum, and an administration fee of $20 per employee per quarter.
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Official resources
General information and estimates only — not legal, financial, or tax advice. Always verify with the Fair Work Ombudsman (13 13 94) or a qualified professional.
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