How do you calculate superannuation from a total package salary?

Superannuation is a compulsory savings scheme where a portion of your income is set aside for your retirement. Super is calculated from your base salary.

If you’re an Australian worker, your employer is required to make superannuation contributions on your behalf to a super fund of your choosing. These contributions are known as the super guarantee (SG).

The SG is the minimum percentage of your salary that your employer is required to pay into your super fund. At the end of 2024 the SG is 11.5% and is legislated to rise by 0.5% and reach 12% in mid-2025.

Am I entitled to superannuation contributions?

The ATO has a helpful tool to determine whether you are entitled to SG contributions from your employer.

When you start a new job, your employment contract will stipulate whether your income is inclusive of super or not. If your income is inclusive of super, the SG will be taken out of what you earn, reducing your take-home pay.

If your contract states that your income is inclusive of super, each time the SG is increased your take-home pay will be reduced. It's worth keeping this in mind when you sign a new employment contract.

Your super contributions must be visible on your pay slips. Additionally, you can log on to your super fund’s website to view them or check your annual statement.

What is a total package salary?

A total salary package or Total Remuneration Package (TRP) is your base salary plus benefits. These benefits may include:

• employer superannuation contribution
• motor vehicle cost/Executive Vehicle Scheme or cash in lieu of a motor vehicle
• motor vehicle parking
• any other benefits or supplementary benefits

How is super calculated from your total package salary?

Superannuation is calculated based on your ordinary time earnings (OTE) and is paid, at least, quarterly. 

For example, if someone received $100,000 in OTE from their employer between 1 July 2023 and 30 June 2024 (when the SG rate was 11.0%), then their employer should have paid them $2750 in super per quarter, which adds up to $11,000 annually.

If this person’s contract was for a total package salary inclusive of super, this would mean that the contract would be for $111,000 per year. But if they were earning a wage plus super, then this would be a $100,000 wage, plus $11,000 in super.

You can estimate the amount of super you are entitled to per quarter based on your OTE using the ATO’s online tool.

What is considered OTE?

Generally, OTE is your gross (before tax) annual salary or wages, which include:

• earnings for ordinary hours of work - for casual workers, these are actual hours worked or piece-rates
• over-award payments
• commissions
• casual and shift loading
• annual leave, sick leave and long service leave
• allowances - excluding expense allowances, reimbursements and fringe benefits
• workers' compensation - returned to work
• performance and Christmas bonuses
• government subsidies

The Australian Taxation Office (ATO) provides a definitive list of payments that are considered OTE.

What’s not considered OTE?

Circumstances and payments that don’t fall under ordinary time earnings include:

• overtime work paid at overtime rates
• expense allowances that are fully expended
• expenses that are reimbursed
• unfair dismissal payments
• workers’ compensation payments
• parental leave
• jury duty
• defence reserve service
• unused annual leave, sick leave and long service leave when employment is terminated

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