Super contributions

Grow your nest egg

If you want to live comfortably when you retire, adding to your employer's super contributions can help build your nest egg. If you're on a lower income, you may be eligible for bonus contributions from the government.

Here we explain how to check your employer is paying you the right amount of super, and show how making extra contributions can boost the amount of super you have when you stop working.

Check your employer contributions

If you are eligible to receive super contributions, your employer must deposit money into your super account. The super guarantee, or minimum amount paid, is 9.5% of your 'ordinary time earnings'. For example, if your ordinary time earnings are $50,000 then you will be paid an additional $4,750 into super.

Ordinary time earnings are what you earn for your ordinary hours of work, including over-award payments, bonuses, commissions, allowances and some paid leave. See the Australian Taxation Office's (ATO's) checklist on using ordinary time earnings to calculate super.

How much super should you get?

Smart tip

If you're a contractor, use the ATO's employee/contractor decision tool to work out if you're entitled to super contributions from your employer.

You are eligible to receive super from your employer if you:

  • earn $450 or more in a month
  • are aged 18 or older.

If you're under 18, or a private or domestic worker (such as a nanny or carer), you must also work more than 30 hours a week to be eligible to receive super from your employer.

See the ATO's key super rates and thresholds.

Work out how much your employer should be contributing to your super account.

Employer contributions calculator

Check how much super you've received

You can see how much super you're being paid by checking your payslip.

Employers calculate super each pay but only have to transfer super into your fund once a quarter. Some choose to pay super more often, so ask your employer how often they pay your super.

To make sure your employer is putting super into your fund, look at your most recent super statement or check your transaction details online. If you have a myGov account you can also log into this to keep track of your super.

Update your details with your super fund

If you don't get a statement from your super fund at least once a year, either electronically or in paper format, they may not have your current contact details. Get in touch with your fund to make sure your details are up to date.

What to do if your employer is not paying your super

Companies that are in financial trouble sometimes break the law by not making super contributions for their staff. If you're not receiving super contributions from your employer, or you're not sure whether you're being paid enough, you can:

  • ask your employer to explain how your super is being calculated and how often they are paying it
  • contact your super fund to check whether your super has been paid
  • sign in to your myGov account and make sure it's linked to the ATO to see how much has been paid into your super fund
  • call the ATO on 13 10 20.

If your employer has not paid your super, you can report them to the ATO. See the ATO's unpaid super from your employer webpage.

Ways to boost your super

By contributing extra money yourself, you can grow your super. Even small amounts add up over time. If you're a low-income earner, you may be eligible for bonus super contributions from the government.

Make pre-tax super contributions

You can ask your employer to pay a portion of your pre-tax salary as an extra contribution to super (concessional contribution). This is commonly known as a salary sacrifice. It can be tax-effective if you earn more than $37,000 per year.

Concessional contributions are capped at $25,000 per financial year. This means the total of your employer and salary sacrificed contributions must not be more than $25,000 each year. If you contribute more than this, you may have to pay extra tax. See salary sacrifice super for more information.

Low-income superannuation tax offset

If you earn $37,000 or less, you may get a 'low-income superannuation tax offset' (LISTO) from the government. The amount, up to $500 annually, will be 15% of the concessional contributions you or your employer made to your super account during the financial year.

You don't need to do anything, the ATO will work out your eligibility and pay your low-income super tax offset directly into your super account. Make sure your super fund has your tax file number (TFN) so you don't miss out on the payment.

Make after-tax super contributions

Simply deposit your personal money into your super. These are called after-tax super contributions (non-concessional contributions) because you have already paid tax on the money. This is different from salary sacrificing, which happens before your income is taxed.

You cannot claim a tax deduction for contributions that you want to keep as non-concessional contributions. The cap for non-concessional contributions is $100,000 per financial year. If you are under age 65 you can bring forward up to 2 years of the non-concessional cap, allowing you to contribute up to $300,000 at a time, depending on your super balance. If you contribute more than this, you may have to pay extra tax. See the ATO's webpage on non-concessional contributions.

Government co-contributions

If you earn less than $52,697 per year (before tax) and make after-tax super contributions, whether small regular contributions or irregular lump sums, you may be eligible for a matching contribution from the government. This is called the government co-contribution.

If you earn less than $37,697 the maximum co-contribution is $500 based on 50c from the government for every $1 you contribute. The amount of the co-contribution reduces as your earnings increase.

To receive the co-contribution you will need to lodge a tax return for the year. The government will then work out how much you are entitled to. If you are eligible, the government will pay the co-contribution directly to your fund. See the ATO's webpage on super co-contributions for more details.

Work out your best mix of super contributions

If you can afford to contribute more to your super, you'll want to know the best way to grow your nest egg.

Work out whether to make extra contributions before or after tax.

Super contributions optimiser

Downsize your home and put money into super

If you have owned your home for more than 10 years and are considering downsizing, you may have another option for investing some of the proceeds from the sale of your home.

If you are aged 65 or older and meet the eligibility requirements, you may be able to contribute proceeds from the sale of your principal residence to super. The contribution can be up to $300,000 per person and is in addition to any other voluntary contributions you make under existing contribution caps. More more information, see the ATO's webpage on downsizing contributions into super.

Super tax deductions

If you make personal after-tax super contributions you can claim them as a tax deduction, effectively making them concessional contributions. This helps self-employed people or those with variable work patterns.

Spouse contribution splitting

You can also split your employer super contributions with your spouse. Contribution splitting can only be done after the end of a financial year. Your super fund will be able to guide you through the process. See the ATO's fact sheet on contributions splitting.

Spouse super contributions

If your spouse earns low or no income, you may be able to claim a tax offset of up to $540 if you make contributions to their complying super fund.

See the ATO's tax offset for super contributions on behalf of your spouse to find out more.

Video: Splitting super with your spouse

Splitting super with your spouse video

Columnist and presenter Jane Caro explains how she and her husband split their super contributions, as part of ASIC's MoneySmart Women talk money video series.

First home super saver scheme

The first home super saver (FHSS) scheme allows first home buyers to save a home deposit within their super fund. From 1 July 2017 any personal voluntary contributions you make to your super can be withdrawn to help buy or build your first home. Contributions to defined benefit super funds are not eligible for release under the scheme.

Under the FHSS scheme, you can withdraw up to $15,000 of eligible contributions made over a financial year or up to $30,000 in total for all years, plus an amount that represents deemed earnings.

To be eligible to withdraw funds under the scheme you must:

  • not have owned property in Australia before
  • be at least 18 years old
  • not have withdrawn money under the scheme in the past.

Non-concessional contributions can be withdrawn tax free. Concessional contributions and total earnings will be taxed at marginal tax rates with a tax offset of 30%. You must enter into a contract to buy or build your first home within 12 months of making a withdrawal under the FHSS scheme or you will have to recontribute the amount back to super or pay additional tax on it.

For more information see the ATO's webpage on the first home super saver scheme

Making extra contributions is a great way to boost your super savings and increase the likelihood of enjoying a happy and comfortable retirement.

Related links

Last updated: 27 Mar 2019