How super works
If you're hoping for a comfortable life in retirement,
spend some time learning about your superannuation (super). Taking
a few steps now could significantly boost your
super and make a big difference to your
What is super?
Superannuation is a tax effective way to save for your
retirement. It's similar to a managed fund where your money is pooled
with other members' money and invested on your behalf by
professional investment managers. Generally you will not be able to
access this money until you retire.
Your employer will make contributions to your super fund and you
can top it up with your own money. The government may also make
contributions if you are a low income earner.
How to choose a super
Most people can choose which super fund they'd like their super
contributions paid into. Check with your employer to make sure you
can choose the fund your super is paid into. Super comparison
websites can help you compare super funds. See choosing a
Some industrial awards specify a fund or a choice of a few funds
that super must be paid into. In these cases you may have limited
or no choice of fund.
When you can choose your super fund, tell your employer by
filling in a standard choice
form from the Australian Taxation Office (ATO) or from
your employer. If you don't (or can't) choose your own super fund,
your employer will put the money into a 'default' super fund, known
as a MySuper account. See types of super funds.
Insurance through super
MySuper funds have a default level of death, disability and
income protection insurance that you will
automatically be covered for. If you don't want this insurance you
will need to tell your super fund you want to cancel it.
Insurance through super can be cheaper than similar cover
outside of super and you can usually request to increase it if the
default cover is not enough to suit your needs. See insurance
through super for more information.
How do I make
There are typically three types of super contributions: employer
contributions, personal contributions and government
Employer super contributions
For most people, your employer must pay an amount equal to 9.5%
of your salary into your super fund account. This is on top of your
salary or wages. Over the course of your working life, these
contributions from your employer add up, or 'accumulate', which is
why they are known as accumulation funds. Your super money is
invested by your super fund so you will earn investment returns on
contributions are based on your 'ordinary time earnings'. For
example, if your ordinary time earnings are $50,000 then you should
be paid an additional $4,750 into super. Ordinary time earnings are
what you earn for ordinary hours of work including over-award
payments, bonuses, commissions, allowances and certain paid leave.
See the ATO's information on using ordinary time earnings to
calculate the super guarantee.
Work out how much your employer should be paying into your super
Super contributions if you're self-employed
If you are self-employed you are responsible for making your own
super contributions, but they are tax deductible. See super for self-employed
people for more information.
Personal super contributions
You can make extra contributions by:
sacrificing - Your employer can direct some of your
pre-tax income into super. This will be deducted by your employer
and sent to the fund with your employer contributions.
- Personal contributions from your pay - You can
ask your employer to make personal contributions from money you
have paid tax on. Lower income earners who do this may be entitled
to government co-contributions. See super
- Bank transfer - You can transfer some of your
savings into your super account using BPay or direct deposit. Ask
your super fund for details.
- Super transfer - Transferring all or some of
your super from another fund into your main super account.
Bonus contributions from the government
If you put your own after-tax money into super, you could
receive a government co-contribution,
depending on how much money you earn. Lower income earners can
receive up to an extra $500 by making personal after tax
contributions. See super contributions.
If you earn up to $37,000 you may also get a 'low income super
tax offset' of up to $500 from the government. You don't need to
add extra money to your super to be eligible for this payment. Both
of these payments will be paid into your super automatically after
you have lodged your tax return.
What happens to my super
Money in your super fund account is invested by your super fund.
Most super funds offer a variety of investment options. These
usually include pre-mixed options that will contain a mix of
different asset classes, and single sector options such as cash,
property and shares.
Your investment returns will impact how quickly your super grows
so it's important to choose an investment option that is
appropriate for your investment timeframe and tolerance for market
fluctuations. See super investment
options for more information.
If you have more than one super fund you can combine them to
save fees and make it easier to keep track of your super. Read more
about consolidating super
When you retire your super can be taken as a lump sum, a regular
income stream, or a combination of both. If you choose to take your
super as a retirement income stream, the money that you're not
accessing continues to work for you and earn interest. See income from
super for more information.
When can I access my
If you retire and have reached your preservation
age, you can withdraw your super. The table below shows when
you can access your super, according to when you were born. Here
are more details on how to get access to your super.
|Your date of birth
Age you can access your super
|Before 1 July 1960
|1 July 1960 - 30 June 1961
|1 July 1961 - 30 June 1962
|1 July 1962 - 30 June 1963
|1 July 1963 - 30 June 1964
|From 1 July 1964
Understanding how super works can help you make
the most of it, whether you are just starting out, are close to
retirement or have already retired. Learn the basics and you can
become your own super hero.
Last updated: 14 Feb 2019