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Is super paid on long service leave?

29 Aug 2023 5 min read

Long service leave is an employment benefit for those who have worked with the same employer for a long period (the time when the benefit is awarded will vary depending on what state you live in). This is applicable to most full-time, part-time and casual workers.1

Leave is paid at your ordinary gross wage.

Does long service leave include superannuation?

Yes. Long service leave is your ordinary gross wage, which includes superannuation. However, if you do not take your long service leave while you’re at your place of employment and instead choose to take a lump sum payment upon leaving the role, you may not be entitled to superannuation payments.

How do employer super contributions work?

As an employer, you are generally required to pay a minimum of 11% of ordinary time earnings (OTE) for an employee over age 18, regardless of how much they’re paid.

OTE usually includes:

  • pay from ordinary hours of work
  • specific allowances
  • paid leave
  • shift loadings.

The super guarantee (SG) contribution rate is proposed to rise to 12% of OTE by 1 July 2025.

What is the super guarantee rate?

The superannuation guarantee is a contribution that your employer must pay to your super. The SG rate is legislated by the Australian Government — it applies to all Australian employees over the age of 18 (and some younger employees)1, regardless of occupation or income.

The superannuation guarantee was introduced in 1992 at just 3%. Before that, employers had no obligation to contribute to the retirement savings of their staff. Now, the super guarantee plays a vital role in the superannuation system.

The SG contributions made to your super are invested in growing your funds for retirement. Investments made depend on your super fund and whether you’ve actively selected your investment. The aim is to reduce reliance on the government age pension for income in retirement.

Who is eligible for super guarantee contributions?

If you’re a working employee and you’re over 18 years old, you’re eligible for SG contributions regardless of how much you earn.2 If you’re under 18, you must work at least 30 hours per week to be eligible for SG.

How is super guarantee calculated?

Your super guarantee contribution is calculated by applying the current SG rate to your ordinary time earnings (OTE). OTE is the amount you’re paid for your ordinary hours of work, including things like commissions and shift loadings. You can find more details on OTE on the Australian Taxation Office website.

Adding more to super

The super guarantee is the minimum amount that goes to your super. Some employers offer a rate above the legislated minimum as an incentive for their employees. You can also add more money to your super through personal contributions. There are limits to how much you can contribute to super, and your SG counts towards your concessional contributions cap.

Read our fact sheet Opportunities and limits for super contributions for full details on contributions limits. If you need help working out how much you can add to super, consider using our advice services.

Start your journey with NGS Super

If you feel ready to review your finances, why not connect with one of our NGS Super Specialists?

Whether at the start of your career journey, approaching retirement or anywhere in between, our Super Specialists are here to help. It’s free, and they can answer your questions about superannuation, investments, insurance or transition to retirement. They can also help you decide the next steps — including if meeting with an NGS financial planner is right for you.

Our financial planners can create strategies that aim to maximise your financial position and meet your objectives for the future. Financial advice can also involve protecting your lifestyle and assets through personal insurance and looking at what happens to your super when you die and the impact on your loved ones receiving your super.

Seeking advice is a way to plan for your future, to mitigate risks and make the most of your saving opportunities. Education is integral to the planning process — it’s important that you feel confident and informed at all times.

1 https://www.service.nsw.gov.au/transaction/use-the-long-service-leave-calculator
2 From 1 July 2022, your level of earnings is irrelevant to your eligibility for super guarantee contributions. Before that, you needed to have earned $450 in a month to be eligible for the SG.

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