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?
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: 18 Feb 2019
