1. How super works

How super works

Superannuation is a way of saving for your retirement.

It’s never too early to start thinking about your super – whether you’re new to the idea, or even new to Australia 

For most employees – under the Government’s Superannuation Guarantee (SG) requirements – a percentage of your earnings (currently 9.5%) is paid by your employer into a super fund for you.

Here's how it works:

It’s a smarter way to save

The tax benefits of super can make it a great way to save for your retirement.

SG contributions are taxed by the Government at 15%, which is generally less than your marginal tax rate. If you are a high income earner (more than $300,000 a year) your contributions will be taxed at 30%*.

You can always boost your super in other ways. You can sacrifice some of your salary (a before-tax arrangement with your employer to pay more than the SG contributions into your super), or make personal, after-tax contributions.

*15% tax is deducted by your super fund and the ATO will issue an assessment to the you for the additional 15%.

Note: In the May 2016 Budget, the Federal Government proposed changes to super, including changes to contributions, eligibility conditions, government limits and tax. The information in this guide is based on current law at the date of publication. As indicated, some of these changes have become law and will come into effect from 1 July 2017. We will update our documents accordingly. You can find the most current information at any time here.