What is super?
Super is the money set aside during our working lives to help support us when we retire. It’s a way of building a nest egg to eventually use as an income stream when you’re no longer earning a wage. It is essentially your retirement savings account.
Generally, your employer will pay a compulsory sum of money into your super account – currently 11% of your income - which your super fund will then invest on your behalf.
Who is eligible for super?
You are eligible for employer contributions to your super if you're:
- over 18 years and employed,
- or under 18 years and work over 30 hours a week.
You are entitled to superannuation regardless of if you are employed full-time, part-time or as a casual, a temporary resident, a private or domestic worker or a family member working in your family's business.
How much super should I get?
The compulsory sum of 11% of your pay is known as the Super Guarantee and is paid by your employer to comply with Australian Taxation Office (ATO) requirements. This rate is set to rise incrementally to 12% by 2025. For those eligible, the government may add to your investment earnings with a co-contribution.
You can add extra voluntary contributions to your super fund from your after-tax income (known as non-concessional contributions) if you choose to, up to the contribution cap of $110,000* per financial year. If you make personal contributions in excess of the cap, you may pay extra contributions tax.
After your employer pays money into your superannuation account as part of the Superannuation Guarantee, you can also ask your employer to pay more of your before-tax pay into your super as salary sacrifice contributions, which are also concessional contributions. Concessional contributions (which include Super Guarantee contributions) are capped at $27,500* per financial year.
If your spouse or partner is a low-income earner, you can make a voluntary spouse contribution and may be able to claim a tax deduction.
Your super guarantee contributions must be paid at least every three months.
You can find out more about the types of contributions and how they are taxed via the ATO.
Can I choose my own super fund?
Yes. Your employer should provide you with a Superannuation standard choice form within 28 days of your start date. If you don’t specify a superannuation fund, your employer will either pay your super into an existing super account that you hold (known as your stapled fund), or their nominated default fund if you do not have an existing stapled fund. Find out more information via the ATO.
When can I access my super?
You can only access the money invested in your super when you reach your preservation age and have permanently retired, or under rare circumstances. You can then choose to withdraw your super balance either as a lump sum or have the money paid into your bank account in regular payments as a pension.
This information is general in nature and provided for informational purposes only. It is not intended to be used as investment or financial advice and does not take into account your personal financial situation, objectives or needs. You should consider obtaining financial advice that is tailored to suit your personal circumstances before making an investment decision or switching your super. Please read the Financial Services Guide and the relevant Product Disclosure Statement(s) and Target Market Determination as well as other important documentation available on our website for information about our products.
*ATO, Contribution caps, August 2022 https://www.ato.gov.au/super/self-managed-super-funds/contributions-and-rollovers/contribution-caps/ (accessed: 23 March 2023).